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... x No Thanks Loading.. Business Success Through The Fairness Doctrine 4/30/2013 by CompleteMarkets Editor This content has not been rated yet. Stephen Covey wrote a seminal book on how to run your life and your business, The Seven Habits of Highly Effective People. It's a must read to fully understand the concepts of this article. Once you've read the book read it again at least once every quarter until you've absorbed these ideas into your psyche and are living those seven habits. One of the seminal habits is "Begin with the end in Mind" . However, an even more important principle of life and business is always do what's right for the end user. The basis of this principle is "Treat others as you would have others treat you." Sound familiar? If we live our lives in that way, we don't become extremists (in any direction); we become proponents of the Fairness Doctrine. Another way of stating the same principal is "be fair to everyone always." The 10 Commandments offers an excellent set of codes for living, regardless of your religious belief (or lack of belief) . A number of these commandments offer guidelines for living a "Principle-Based Life": Honor Your Parents if they deserve honor. I hope that they raised you as best they could. However, it's extreme to presume that all parents deserve honor Treat them as you would have your children treat you some day and treat your children in a way that will cause them to "honor" you: firmly, but fairly ) . Never cheat yourself ...

... Pueblo, CO 81005, (719) 485-3868, fax (719) 485-3895, e-mail [email protected] , or Web site www.burand-associates.com . &# 160 AGENCY VALUATIONS: WHICH DEFINITION IS BEST FOR YOU? When asked to complete an agency valuation, experience has taught us the first question we should ask is, What definition of value would you like to use? ' This might sound esoteric, but it's something all agency owners should consider before having their agency valued. Different definitions are appropriate for individual situations and lead to far differing values. Here's a summary of the most common definitions of value, their strengths, and their weaknesses. Each definition requires its own set of assumptions and adjustments. This summary is not meant to be all encompassing or to be used without further guidance. FAIR MARKET VALUE Definition: Fair Market Value (FMV) is based on the price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell; both parties having reasonable knowledge of the relevant facts. Additionally, a landmark ruling states, The willing buyer and the willing seller are hypothetical persons, rather than specific individuals or entities, and the characteristics of these hypothetical persons are not necessarily the same as the personal characteristics of the actual seller or a particular buyer. Furthermore, FMV assumes the buyer is an arms-length, financial and not a strategic buyer. A strategic buyer is a buyer who could bring value-added benefits that would enhance the agency and/or enhance the buyer's other ...

... x No Thanks Loading.. Establishing Agency Value 4/30/2013 by CompleteMarkets Editor , Chris Burand This content has not been rated yet. Why nine out of ten agency acquisitions end up losing money. If you're considering buying, merging, or selling an agency now or in the future, consider this: Preliminary results of a current study show that 90% of all insurance agency acquisitions lose money! A primary reason is that buyers and sellers are using "average agency value" or "fair market value" as the price. We've all heard these terms discussed at conventions and on golf courses, but how do they contribute to unprofitable acquisitions? Let's discuss both terms and take a brief look at what goes into an agency valuation. AVERAGE AGENCY VALUE First, average agency value is exactly that: An average. If you have a perfectly average agency, this value is for you. However, all agencies are not created equal, and chances are good that your agency has certain features that are better or worse than average. Agencies that are growing, are being managed professionally, and have large books with their companies are worth more because their futures are better. Similarly, agencies with riskier futures are worth less. Total agency values usually range from .5 to 4.0 times revenues — a huge range. To assume that your agency falls exactly in the middle is simplistic and unrealistic. For example, an agent recently said that his agency should sell for 1.5 times revenues because that's what agencies in his area were selling for. What if his agency is better managed ( ...

... trying to squeeze blood from a turnip. These "producers" are often good people with other valuable attributes, so perhaps you can find them a more appropriate job at a more appropriate wage. Agencies expend a considerable amount of time, money, and energy trying to get non-producing producers to produce; so once an agency helps these people find a different position that fits their skill set better, it can focus more resources on people who can sell. Once the production team consists entirely of true producers, what resources does an agency owe its true producers? Good customer service representative (CSR) when the producer's production is sufficient to earn a CSR, but not before. By "good," I don't mean a CSR who will do the producer's work for him or her. A fair wage for honest, good work. What is fair work? A true producer must generate at least $300,000 a year of self-produced commissions. An agency with a good reputation. An effective IT system. Quality training and mentoring. This is not only fair, but it is also smart producer management. That's it. Agencies don't owe their producers anything else. They don't owe them an expense account, a car or even a lead list. These items can arguably make producers more successful, but that does not mean the agency owes them these perks. These items are truly perks. What would happen if these perks increased as a producer's book increased? When an agency increases producers' perks as their books increase, it's focusing significant resources on its most important assets, ...

... market conduct practices and those of the industry. By promoting collective performance improvement, the Program aims to strengthen consumer confidence in the life insurance business. The current Market Conduct Program applies to individually-sold life insurance and annuity products. IMSA has established six Principles of Ethical Market Conduct. A company that seeks membership (requiring recertification and renewal every three years) responds to a number of questions to determine that it has high levels of adherence to these Principles. Following this self-assessment, an Independent Assessor confirms the documentation to support the 162 Yes' responses required for membership. Each Life insurance company subscribing to IMSA commits itself in all matters affecting the sale of individual Life and annuity products to these six principles: IMSA'S SIX PRINCIPLES OF ETHICAL MARKET CONDUCT 1. To conduct business according to high standards of honesty and fairness and to render that service to its customers which, in the same circumstances, it would apply to or demand for itself. 2. To provide competent and customer-focused sales and service. 3. To engage in active and fair competition. 4. To provide advertising and sales materials that are clear as to purpose and honest and fair as to content. 5. To provide for fair and expeditious handling of customer complaints and disputes. 6. To maintain a system of supervision and review that is reasonably designed to achieve compliance with these Principles of Ethical Market Conduct. WHAT DOES THIS MEAN TO YOU? Agents need to be aware of the process because the companies with whom they place business will usually tell them to observe new standards of sales practice and market conduct. What you do and ...

... x No Thanks Loading.. Claims Questionnaire 4/30/2013 by CompleteMarkets Editor This content has not been rated yet. CLAIMS QUESTIONNAIRE NAME: _____ PHONE #: _____ TYPE LOSS: _____ DATE: _____ COMPANY: _____ The purpose of this form is to help us evaluate our claims service to you. Your honest answers and comments will help us evaluate our insurance company's service. If you wish to discuss this matter in person, please call us. 1. Was our office courteous, prompt, and efficient in taking care of your claim? ___ GOOD ___ FAIR ___ POOR Comments: _____ 2. Do you feel the policy you have with us needs any additional explanation? __ YES __ NO Comments: _____ 3. Was the insurance company adjuster who handled your claim for you courteous, prompt, and efficient in taking care of your claim? ___ GOOD ___ FAIR ___ POOR Comments: _____ 4. Was the settlement of your claim fair and honest? ___YES ___NO Comments: _____ &# 160 THANKS SO MUCH FOR YOUR HELP! &# 160 GOOD FAIR POOR N/A TOTALS OFFICE SERVICE (# 1 ) 58 2 1 61 ADJUSTER SERVICE (# 3 ) 48 3 4 6 61 YES NO NO ANSWER ADDTL POLICY INFO? (# 2 ) 1 60 61 FAIR SETTLEMENT? (# 4 ) 57 4 61 Login or Register (for FREE) to gain access to thousands of other great articles. Need more reasons to join? Need insurance for you, your business or your family? Get quality ...

... claims service to you as part of our overall commitment to our clients. In order for us to continue to provide the service due our customers, it is necessary for us to receive feedback after a claim is settled. Would you be so kind as to please complete the enclosed form and return it to us at your earliest convenience. Sincerely, Enclosure   CLAIMS QUESTIONNAIRE Name____ Phone____ Type Loss____ Date____ Co.____ The purpose of this form is to help us evaluate our claims service to you. Your feedback will help us improve our services to you and others and evaluate our insurance company's service. Please call us if you would like to discuss this matter in person. 1. Was our office courteous, prompt, and efficient in handling your claim? Excellent Good Fair Poor Comments: 2. Do you feel the policy you have with us needs any additional explanation? Excellent Good Fair Poor Comments: 3. Was the insurance company adjuster who handled your claim for you courteous, prompt, and efficient in the handling of your claim? Excellent Good Fair Poor Comments: 4. Was the settlement of your claim a fair and honest one? Excellent Good Fair Poor Comments: THANK YOU FOR YOUR VALUABLE INPUT! 11. CSR/Claims Representative updates customer's electronic claims file. 12. CSR/Claims Representative deletes any unnecessary follow up dates. 13. If customer returns claims letter, file in Insurance Company file to review with Company Representative on a regular basis. (Also if there are criticisms of agency's handling of claims, refer to agency principal) ...

... in budgets because agency growth (overall productivity) and agency profit predetermine the amount available for raises. A specified percentage of revenue is predetermined to be the total staff compensation level. The employees earn raises by virtue of their productivity gains within the budgetary limits. The ICP also avoids the subjectivity of traditional merit-raise programs. Evaluations become tools for employee development, rather than the rationale for the level of raise given. The manager can't forsake the duty to evaluate employees' performance. His or her job is to identify an employee's weaknesses and correct them through a development plan, and to assist employees to develop their careers further to make them more productive for themselves and the agency. Whether or not you choose to pursue an ICP in your business, the key to employee development and retention lies in fair and equitable compensation, fair and equitable evaluation, and genuine appreciation for the staff's efforts. Remember, appreciation is reflected by your actions, not your words. Some managers verbally express appreciation and then publicly criticize or demean employees. The employees know that managers' actions reflect their true feelings. Compensation can be fair only if the agency has the profits to afford raises and if the employees understand the ingredients that go to make up their pay raise. If they believe that their raises are determined subjectively and that management is more concerned with enhanced profit than with fairly paid employees, no raise will be viewed without suspicion and no performance evaluation will be accepted as honest. In the past, all evaluations have been tied to pay raises. Management could not provide a glowing evaluation and a meager ...

... hindrance. You may be tempted to gear the objective to what they have been able to accomplish in the past. Forget about what has (or has not) happened and focus the goal setting on what you would expect a new employee with the same level of education and experience to accomplish. This process will provide both the agency and the producer with the opportunity to make a fresh start. The agency's lackadaisical approach to sales management may have been a major cause of the producer's failure to produce as well as you both had hoped. By providing the direction and guidance now, you may be able to salvage this person's potential and turn him or her into a more valuable member of the team. At the very least, you will be setting up a program that will allow you to fairly and legally rid the agency of costly dead wood. An integral part of the new relationship with the producers will be the agency's specific definition of what it wants producers to sell since it makes sense to have them concentrate on accounts that they have a good chance of attracting and retaining. This means that you have to review the current appetites of the major carriers and decide whether the producer should be a generalist or whether he or she should specialize in a certain type or size of account or in a particular line of business. It is important to consider the producer's own experience and desires, but the final decision should be driven by the availability of competitive products and services from major markets and the agency's overall business plan. Agency management also has to decide what each individual producer is expected ...

... who, in absence of a contract, is free to compete for business and enjoys enough goodwill to take clients with him or her The departure of non-owner producers who control accounts, and operate in a non-contractual or contractual vacuum Termination of the agency by a major carrier that held majority volume and provided competitive products Financial mismanagement of the firm, culminating in a virtual fire sale The untimely death or disability of the owner, without the benefits of perpetuation planning or the funding for such eventualities A promise from amajor long-term carrier for competitive products, competitive pricing, and underwriting latitude for the long haul-if the agency will roll over existing business or give the carrier first shot at new business CASE STUDIES Just how does the consultant address and evaluate the ailing patient-or forensically examine the corpse-of an agency that has a distressed fair market value? Let's examine each of these scenarios in the light of Section 2031 of the estate and gift tax code, which is found in Rulings 59-60 (evaluation of a closely held corporation): Case A: The Departing/Divorcing Owner I'll just take the business and move across the hall, and then it won't be worth a tinker's damn. In the divorce scenario, one spouse may have the goodwill of the client base, while the other has a vested interest in the value of the community property. Section 2 of the ruling addresses whether a firm or an individual has goodwill; it also deals with the evaluation challenge, should a key manager depart. Stir into this brew the fact that the goodwill bearer serves in absence of contract, and therefore has no compulsion to continue ...