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Ohio BMV’s Random Selection Program Comes to an End

The program that has been administered by the Ohio Bureau of Motor Vehicles (BMV) since 1998 to randomly check to ensure that Ohioans are complying with the state’s financial responsibility laws has ended. Effective July 3, 2019, the BMV will no longer require proof of financial responsibility through a random selection verification process.

Earlier this year, language to eliminate the program was inserted by the Senate Transportation Committee to the state transportation budget to eliminate the verification program. This program had been a target for elimination by some legislators for years as it became increasingly ineffective at catching uninsured drivers, and thus was viewed by some as burdening responsible drivers who comply with the law.

OIA is the only organization that weighed in on the elimination of this program. In our testimony, we emphasized that the last Financial Responsibility Study Committee Report issued in 2014 recommended REPLACING the BMV’s random selection program – not simply eliminating it. Furthermore, we made clear that we do have concerns about not replacing this program with a more robust auto insurance verification system that capitalizes on the technological advances that have become available in the last several years. To date, an effort to do so has yet to get underway, yet more than half of the states have passed laws and begun to develop and implement online auto insurance verification systems to identify uninsured motorists.

WHAT CHECKS REMAIN?

With the elimination of this program, the checks that remain for financial responsibility include traffic stops and individuals affirming that they have proper financial responsibility when they apply for a permit/license or they register a vehicle.

IMPACT ON YOUR CLIENTS

According to the BMV, Ohioans with random selection suspensions prior to July 3, 2019, will still be required to provide proof of insurance or comply with the reinstatement requirements. In order to cancel a random selection suspension, the individual must provide proof of liability insurance coverage listing the selected vehicle in effect for the requested verification date. The individual may submit a copy of his or her automobile insurance policy declarations page, insurance identification card or a letter on insurance company letterhead and signed by the agent indicating liability insurance was in effect.

QUESTIONS OR COMMENTS?

Contact Carolyn Mangas, OIA’s Government Affairs Manager, at carolyn@ohioinsuranceagents.com.

Also see: Ohio BMV’s Financial Responsibility Random Verification Program Eliminated


Agents Advocate for Commonsense Solutions on Taxes, Flood Insurance and Storm Scammers

OIA’s Advocacy Day 

In June, OIA leaders and members of OIA’s Advocacy and Political Committee from around the state met with Ohio policymakers to advocate on issues that affect their clients and shared the importance of their role as trusted insurance advisors to individuals and business owners.

Issues

OIA members shared their perspective on several issues, including advocating against the proposed tax increase that the Ohio House inserted into the state budget that would have a negative impact on many OIA members and their clients. Currently, Ohio has a Business Income Deduction (BID) in place that allows pass-through entities to deduct up to $250,000 of their business income from Ohio income tax liability. Additionally, a flat three percent tax on all business income above the $250,000 exists. In an unexpected move, the Ohio House has proposed that the BID be reduced from $250,000 to $100,000 and that the three percent flat tax rate be eliminated altogether. Further complicating matters, the House has proposed making these changes retroactive to Jan. 1, 2019, potentially subjecting taxpayers to fines and penalties on estimated payments they have already made.

OIA Members also lobbied for support of forthcoming legislation that will be introduced by Senate Majority Whip Jay Hottinger to make changes to Ohio law to regulate residential roofing contractors. The intent of the legislation is to protect consumers from “storm scammers” who often fail to complete work and deceive consumers about their need for unnecessary repairs following severe weather events. 

Conversations with Ohio’s Leaders

Prior to visits with policymakers, OIA committee members met with the ODI Director Jillian Froment, Chairman of the Senate Insurance Committee Bob Hackett and high-level representatives from the Ohio Bureau of Workers Compensation, including John Logue who serves as Chief of Strategy and Kendra DePaul, manager of the Other States Coverage Program.

To kick off Advocacy Day and thank committee members for their involvement, OIA hosted a reception and dinner with key legislators in the evening on June 18. Legislators in attendance included Sens. Jay Hottinger and Bob Hackett and Reps. Haraz Ghanbari and Tracy Richardson. To conclude the evening, special guest Lt. Gov. Jon Husted discussed how his role as Director of both the Governor’s Office of Workforce Transformation and InnovateOhio will lead the way for better solutions to the state’s greatest challenges. Much like OIA is leveraging data to help independent agents in a number of ways, the state of Ohio also sees the value in capturing and utilizing datapoints to get a more comprehensive view of different issues and better direct resources in problem solving.

Get Involved

OIA’s Advocacy Day was a great opportunity to showcase the thought leaders in Ohio’s insurance community and at the same time advance our advocacy agenda in the Ohio Legislature. OIA greatly appreciates the time and expertise our members offer to support OIA and the independent agent community.

If you are interested in becoming involved in our advocacy efforts, contact Carolyn Mangas at carolyn@ohioinsuranceagents.com.

Advocacy Day was “a great combination of interaction and information with legislators as well as networking with other agents”.

– Andy Stephey CIC, CRM, LUTCF - UIS Insurance & Investments, Tiffin

Big “I” Legislative Conference

In May, OIA’s advocacy team, along with a group of Ohio independent agents, visited with lawmakers in Washington, D.C. during the annual Big “I” Legislative Conference.

A diverse group of Ohio independent agents were in attendance, from young professionals to experienced leaders in the industry, as well as representatives from small and large agencies. Overall, the event brought together more than 1,000 independent agents from across the country to lobby for issues such as crop insurance, state versus federal insurance regulation, health care and cybersecurity.

“I definitely now see our

issues on a larger scale

and the impact we as

agents and OIA can

have on the outcomes,”

shared Kirt Trimble,

CPCU of Trimble Insurance

in Delaware after

attending the conference

Issues

Top issues discussed were a long-term reauthorization of a modernized National Flood Insurance Program (NFIP) that would increase take-up rates, both in the NFIP and the private market, and calls on Congress to extend the NFIP before it was set to expire on May 31, 2019. Fortunately, a lapse was averted, and Congress has ultimately extended the program until Sept. 30. Since 2017, the NFIP has seen numerous lapses which have significantly impacted consumers, small businesses and real estate markets in addition to undermining confidence in the program. 

In addition to the NFIP, continued tax relief for independent agents was also a key issue. As part of the tax reform package passed in 2017, a significant victory was secured for independent agents when the Treasury Department issued regulations earlier this year that ensured that insurance agents and brokers could take advantage of the 20% deduction for certain small businesses that are sent up as pass-through entities. Notably though, the 20% deduction is currently scheduled to expire at the end of 2025. With this date not far off and Congress oftentimes waiting until the last minute to act, independent agents made a push while on Capitol Hill for members of Congress to support legislation which would make the small business deduction permanent.

After seeing how advocacy works at the federal level by attending the Legislative Conference, Bill Brooker, CPCU of Brooker Insurance Agency in North Royalton, said “I had a very rewarding experience and now feel a strong curiosity towards state level legislative issues.”

Interested in Attending?

If you are innterested in attending the 2020 Big “I” Legislative Conference on May 13-15, contact Carolyn Mangas at Carolyn@ohioinsuranceagents.com.


 


DEWINE SIGNS STATE BUDGET; SIGNIFICANT TAX INCREASES FOR AGENTS AVERTED

This morning, Gov. DeWine signed the state’s two-year operating budget into law. Of importance to agents is that the language that would have resulted in a significant tax increase for many members was NOT included in final bill, as the final budget largely restored the Business Income Deduction (BID) that allows pass-through entities to deduct up to $250,000 of their business income from Ohio income tax liability. Additionally, a flat, three percent tax on all business income above the $250,000 remains intact.

The BID was a big sticking point in budget negotiations, and a 17-day extension was passed on June 30 to allow more time for negotiations on this and a number of other issues. Notably, the final budget language does eliminate BID eligibility for lawyers and lobbyists. With this change coming at the last minute, the potential ramifications of this language on agencies that employ Ohio-licensed attorneys is still being determined.

BACKGROUND ON THE BID

The business income deduction (BID) that was created a few years ago to level the playing field for pass-through entities (sole proprietors, LLPs, LLCs, S-corps) that pay both the commercial activity tax (CAT) and income tax. The BID was first established in 2013 and finalized in 2015. It has been in place in its current form just since Tax Year 2016. In 2016, the Ohio General Assembly instituted the final version of the BID allowing pass-through entities to deduct up to $250,000 of their business income from Ohio income tax liability. Additionally, a flat, three percent tax on all business income above the $250,000 was implemented.

The majority of OIA member independent insurance agencies are set up as pass-through entities. It is also important to note that more than 80% of our members employ less than 10 people, and these independent insurance agencies survive on small margins.

OHIO HOUSE PROPOSED CHANGES TO BID

The Ohio House’s version of the state budget reduced from $250,000 to $100,000 the maximum deduction and eliminated the three percent flat rate to pay for a 6.6 percent across the board income tax reduction. The House has proposed making these changes retroactive to January 1, 2019, potentially subjecting taxpayers to fines and penalties on estimated payments they have already made.

OHIO SENATE PROPOSED CHANGES TO BID

The Ohio Senate’s proposed state budget restored the BID to $250,000, but proposes the elimination of the three percent flat tax rate beginning in 2020.  OIA is grateful to the Senate for their support in keeping the threshold at $250,000 and not making the elimination of the three percent flat tax rate retroactive.

OIA ADVOCATES AGAINST BID CHANGES

In June, OIA leaders and members of OIA’s Advocacy and Political Committee from around the state met with Ohio policymakers to advocate on issues like the proposed changes to the BID. OIA members shared their perspective and advocated against this tax increase that would have resulted in a negative impact on many OIA members and their clients.

OIA also engaged in a number of meetings on this issue with a coalition of associations that also opposed these tax changes. In late June, OIA signed onto a letter that was sent to Ohio’s leaders urging them to keep Ohio business taxes stable and to continue to support small business owners in their efforts to reinvest in their business by preserving the BID.

OIA greatly appreciates all the time that members took to educate legislators on the importance of the preservation of the BID. Ultimately, the removal of the BID language is a huge win for Ohio agencies.

Stay tuned for further details on the state budget in the coming days.


Also see: 

Interim State Budget Passed; BID Tax Issue Still Undecided

Ohio House Passes State Budget With Significant Tax Increase For Small Businesses


Interim State Budget Passed; BID Tax Issue Still Undecided

With a deal not reached on the two-year state operating budget by the June 30th deadline, the Ohio General Assembly sent an interim state operating budget to Gov. DeWine for approval last night. While state operations will remain funded for the next 17 days, OIA remains concerned about significant changes that have been proposed to the Business Income Deduction (BID) via the state budget that would result in significant tax increases for many OIA members. The BID allows pass-through entities to deduct up to $250,000 of their business income from Ohio income tax liability. Additionally, a flat, three percent tax on all business income above the $250,000 exists.


Background on the BID

The business income deduction (BID) that was created a few years ago to level the playing field for pass-through entities (sole proprietors, LLPs, LLCs, S-corps) that pay both the commercial activity tax (CAT) and income tax. The BID was first established in 2013 and finalized in 2015. It has been in place in its current form just since Tax Year 2016. In 2016, the Ohio General Assembly instituted the final version of the BID allowing pass-through entities to deduct up to $250,000 of their business income from Ohio income tax liability. Additionally, a flat, three percent tax on all business income above the $250,000 was implemented.


The majority of OIA member independent insurance agencies are set up as pass-through entities. It is also important to note that more than 80% of our members employ less than 10 people, and these independent insurance agencies survive on small margins.


Ohio House Proposed Changes to BID

The Ohio House’s version of the state budget reduced from $250,000 to $100,000 the maximum deduction and eliminated the three percent flat rate to pay for a 6.6 percent across the board income tax reduction. The House has proposed making these changes retroactive to January 1, 2019, potentially subjecting taxpayers to fines and penalties on estimated payments they have already made.

Ohio Senate Proposed Changes to BID

The Ohio Senate’s proposed state budget restored the BID to $250,000, but proposes the elimination of the three percent flat tax rate beginning in 2020.  OIA is grateful to the Senate for their support in keeping the threshold at $250,000 and not making the elimination of the three percent flat tax rate retroactive.

OIA has been engaged in a number of meetings on this issue with a coalition of other associations that also oppose these tax changes. Last week, OIA signed onto this letter that was sent to Ohio’s leaders urging them to keep Ohio business taxes stable and to continue to support small business owners in their efforts to reinvest in their business by preserving the BID.

With a looming state budget deadline of June 30th and no agreement reached between the Ohio House and Ohio Senate on a final two-year operating budget, the Ohio Senate passed a 17-day interim state budget late Saturday night and last night the Ohio House also agreed to support this extension.

At this time, the tax changes are a major sticking point between the House and the Senate along with education funding and health care changes. With an interim operating budget now in place, more time can now be afforded to continue negotiations on a final two-year state operating budget. Notably, both the House and Senate voted to eliminate the three percent flat rate on income more than $250,000, so it is unlikely to return in the final bill.


OIA will provide an update on the state budget and the fate of the BID as more information becomes available.


Also see: Ohio House Passes State Budget With Significant Tax Increase For Small Businesses


ARLINGTON/ROE PROMOTES CARR, SNIDER AND JOHN TO VICE PRESIDENT

Indianapolis – Jennie Carr, Robin Snider and Terri John have been promoted to vice presidents at Indiana-based Arlington/Roe according to James A. Roe, president and CEO of the company, a managing general agency and wholesale insurance broker. Carr, Snider and John joined the company in 2004, 2010 and 2011, respectively.

Jennie Carr, CIC, AU was named Vice President, Brokerage. She began her Arlington/Roe career in 2004 in marketing and advanced to a commercial underwriter position and later to senior broker. Jennie is an active participant in Indiana Young Agents and gives her time, energy and leadership in service to advance the careers of future agency leaders. She is a member of the WSIA Education Committee. Jennie graduated from Indiana University with high honors. She earned the Associate Underwriter (AU) designation in 2010 and the Certified Insurance Counselor (CIC) designation in 2011.

Robin Snider, AU, was named Vice President, Healthcare and Human Services and Standard Small Business. She had most recently served the company as practice leader of the healthcare and human services group and the standard small business team after joining Arlington/Roe in 2010. Her previous experience includes business and sales management, underwriting and account management on both the retail and carrier side. She has also served as an elected officer and board member for multiple city/county chamber of commerce board of directors. She is a graduate of Ball State University and holds the Associate Underwriter (AU) designation.

Terri John, ASLI, was named Vice President, Commercial Lines. She joined the company in 2011 as a commercial underwriting associate and advanced to underwriter and broker. She is a graduate with honors of the insurance and risk management program at Indiana State University where she served in several officer roles for Gamma Iota Sigma, the international insurance, risk management and actuarial sciences collegiate fraternity. Terri also had the opportunity to intern in several areas of the insurance industry including an excess and surplus lines company, an MGA/wholesale brokerage and two independent insurance agencies. Terri holds the Associate in Surplus Lines Insurance (ASLI) designation.


About Arlington/Roe 

Arlington/Roe is a family-owned managing general agency and wholesale insurance brokerage headquartered in Indianapolis, Indiana with offices also in Ohio, Michigan, Illinois, Kentucky, Tennessee, Missouri, Minnesota and Wisconsin. Arlington/Roe was founded in 1964. Arlington/Roe’s specialty departments include Aviation, Bonds, Farm, Personal Lines, Commercial Lines (Underwriting and Brokerage), Transportation and Garage, Professional Liability, Workers’ Compensation and Healthcare & Human Services. The company writes in excess of $220 million in annual premium. 

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