Personal Umbrella Rate Change

RLI Personal Umbrella rates will be changing as of 4/1/2019 for new business and 6/1/2019 for renewal business in most states.  As of today, RLI has received approval in all states except California and Colorado for a modest rate increase. We will also be introducing additional rating changes at this time. Highlights to be aware of include:

  •  A 5% increase on Excess UM/UIM rates, including states rated on a per driver basis. For example, $150 per driver becomes $158 per driver

  • Incident surcharge for drivers under 22 and/or 80 and older have increased from $100 per incident to $200 per incident. In addition, this question (question 14 on new business) will be split into 14a and 14b in PUP Access, but will remain the same combined question on the paper application.

  • On new business, we have removed the $100 surcharge for a driver licensed less than one year, with a permit, or international license (Question 13). A response greater than zero will continue to place the risk in PUP Special, and restrict to $1M coverage.

  • Surcharge increase for households with a youthful or inexperienced operator, as well as an increase in the 80+ surcharge in NY, PA, and GA.

As always, the updated rates will be available by quoting within PUP Access or at, and will be in compliance with state-approved filings.

Please refer to the below chart for the effective dates for New and Renewal Business: 


Place your personal umbrella business in RLI’s home-business insurance program. The most popular business classes include, jewelry (costume or “fashion”), photography, tutor/teacher and crafter.” 

For more information on the rate change visit or visit our page on RLI Personal Umbrella Insurance. 

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Big ā€˜Iā€™ Secures Tax Break for Pass-Through Agencies

On Friday, the IRS issued final regulations governing Section 199A of the tax code. The rule confirms that owners and shareholders of insurance agencies and brokerages organized as pass-through entities are eligible for a tax deduction of up to 20% on “qualified business income”—regardless of taxable income level. The deduction is available for taxable years 2018 through 2025.

The new deduction reduces the top effective tax rate on pass-through income to approximately 29% from 37%. For those in the 24% bracket, it can reduce the rate to as low as 19.2%.

The regulation is a significant government affairs victory for Big “I” member agencies. Since passage of the 2017 tax reform law, the Big “I” has been aggressively advocating before Congress and the Trump Administration to ensure that insurance agencies and brokerages organized as pass-through entities fully benefit from tax reform.

The final regulation is substantially similar to a draft regulation released in August. Under the regulation, owners and shareholders of insurance agencies and brokerages where the owner or shareholder’s annual taxable income does not exceed $315,000 for joint filers and $157,500 for single filers in 2018 can take a 20% deduction on qualified business income.

For insurance agencies and brokerages where the owner or shareholder’s annual taxable income exceeds these levels, the deduction is available for qualified business income derived from the sale and servicing of insurance products. However, the deduction may be limited on income derived from consulting or financial services activities if that non-traditional income exceeds certain de minimis thresholds. Additionally, above these same income levels, the total amount of the deduction cannot exceed 50% of employee W-2 wages, or 25% of W-2 wages plus 2.5% of capital assets, such as tangible property purchased for the business—whichever is greater.

Owners and shareholders of insurance agencies and brokerages organized as pass-through entities can take full advantage of the 20% deduction, no matter their taxable income levels, because the IRS does not consider the sale and servicing of insurance products to be a “specified service trade or business.” Other professions such as doctors, lawyers, accountants, stock brokers and certain consulting and financial advisory activities are a “specified service trade or business” under the regulation.

Owners and shareholders of “specified service trades and businesses” with annual taxable income between $315,000 and $415,000 (joint) and $157,500 and $207,500 (single) will slowly see the deduction phased out. Those above $415,000 (joint) and $207,500 (single) are prohibited from utilizing the new deduction.

While a major victory Big “I” members, the regulations are complex. The Big “I” encourages members—especially those who derive income from non-traditional activities—to consult a tax professional to determine how the new deduction specifically impacts their businesses.

Jennifer Webb is Big “I” federal government affairs counsel.

Gov. DeWine Reappoints Froment as Insurance Director; McCloud to Head Ohio BWC

A few days before his official swearing in, Gov. DeWine made appointments to fill nearly his entire cabinet. All cabinet appointees are new to their roles, with the exception of Jillian Froment, who DeWine reappointed to continue to serve as the Director of the Ohio Department of Insurance.

Director Froment has spent the past eight years at the Ohio Department of Insurance in several high-level positions including Assistant Director, Chief Administrative Officer and Deputy Director. In May of 2017, Gov. Kasich appointed her Director.

In addition to serving as the head of ODI, Froment serves in prominent leadership roles for two national insurance organizations focused on consumer protection and the modernization of state insurance regulation. In November, it was announced that she was re-elected chair of the Interstate Insurance Product Regulation Commission as well as secretary-treasurer of the National Association of Insurance Commissioners Midwest Zone.

Gov. DeWine also appointed Stephanie McCloud to head the Ohio Bureau of Workers’ Compensation. McCloud is a veteran executive with a diverse background that includes 20 years of experience in public administration and workers' compensation. She most recently served as senior vice president at Sedgwick Claims Management Services while managing her private Columbus law firm, McCloud Law LLC.

McCloud began her career as a staff attorney at BWC before serving as legal counsel to both former Governor George Voinovich and the Ohio Department of Transportation. She later joined the office of former Attorney General Jim Petro, first as senior deputy attorney general before advancing to chief counsel.

In addition to these developments, Larry Householder was elected earlier this month to serve as the Speaker of the Ohio House of Representatives. Given this change, it is not yet known who will be named to lead the House Insurance Committee. Senate legislative committee announcements are also forthcoming from Larry Obhof, who was re-elected by his peers to serve once again as the Senate President.

What’s ahead in 2019?

As is the norm in the start of a new General Assembly, the first order of business will be the next two-year budget.

As for insurance issues, another attempt will likely be made to pass legislation to help OIA members who write group health insurance by requiring health insurance companies to provide claims data to those with fifty or more enrolled employees in their group. Unfortunately, Senate Bill 227, which would have achieved this, failed to make it across the finish line in December before the end of the last legislative session – mostly due to running out of time.

OIA supports this initiative, along with other groups such as the Ohio Association of Health Underwriters and the National Federation of Independent Business, because allowing risk advisors and employers access to claims data will help Ohio employers to properly assess their health care options and make better coverage decisions.

In addition, guidance and rules are yet to be developed by the Ohio Department of Insurance for the new insurance-specific Ohio cyber law. This law has several provisions, including investigation and breach requirements that all agencies, regardless of size, will be required to comply with should they learn that a cybersecurity event has or may have occurred. In certain instances, notification of a breach may even be required to the Ohio Department of Insurance.

Large agencies will also be required to develop and maintain a comprehensive written cybersecurity plan and exercise due-diligence requirements over third-party service providers.

An effective date is not yet available for Senate Bill 273, but it will likely be around mid-March. Stay tuned -- OIA will continue to keep you informed on these new cyber requirements as more information becomes available.

Learn more about SB 273.

Ohio Insurance Agents Association establishes data analytics company

GAHANNA, OH – Ohio Insurance Agents Association, Inc. (OIA) creates IntellAgents, LLC, a first-of-its-kind, analytics-driven organization that specializes in actionable insights for independent agents.

IntellAgents, LLC was formed to help independent agents across the country leverage big data in order to make better business decisions for their agencies. Through partnerships with other state-based independent agents’ associations, IntellAgents will have access to thousands of isolated data points across independent insurance agencies and be able to turn them into business intelligence.

"The independent agency system has been overlooked and underutilized in a world driven by data analytics. That ends today. Through this collaborative effort, independent agents will have access to advanced data analytics resources and business intelligence to propel their businesses into the future," states Jeff Smith, CEO of OIA. "Ultimately, these efforts will allow independent agents nationwide to improve the experience and guidance they provide to consumers."

"We have built the largest warehouse of independent agent data in the country to help agents grow, make informed business decisions and compete in the ever-changing insurance marketplace. The benchmarks and insights that we can provide to agents are more relevant than the national benchmarks that are available today. Utilizing the data in a specific marketplace is much more meaningful to our agents and will allow them to make informed business decisions about the growth and future of their agencies," states Carey Wallace, CEO of IntellAgents.

To date, Ohio Insurance Agents Association is joined by six additional investors, including the Florida Association of Insurance Agents, Independent Insurance Agents of Illinois, Massachusetts Association of Insurance Agents, Michigan Association of Insurance Agents, Insurance Agents & Brokers of Pennsylvania, Maryland and Delaware, and Independent Insurance Agents of North Carolina, to lead the effort in bringing data analytics insights to independent agents.

IntellAgents products and services will be in the investor states, as well as several other “subscriber” states, in 2019. Availability will continue to expand rapidly throughout 2020.   

"We are excited to partner with our colleagues on this initiative that will provide our members the data-driven strategic insights they need to excel in today’s increasingly competitive environment," said Nicholas A. Fyntrilakis, President and CEO of the Massachusetts Association of Insurance Agents. "As an association, we need to evolve and ensure we are providing value to our agents, and IntellAgents is key to that evolution."

"Bringing together agent-led organizations who all share the same mission, to help independent insurance agents grow and prosper, ensures that our agents’ success is always the focus of IntellAgents. Our state association organizations are perfectly positioned to maintain the trust and loyalty of thousands of independent insurance agents across the country. It is a natural fit with our collective mission to leverage independent agents’ data to provide meaningful insights and offer business consulting services to put those insights to use in agencies across the country," said Carey Wallace. 

"The insurance industry has long relied on data to both improve and be more efficient. Unfortunately, independent insurance agents haven’t had the resources to do the same," said Jason Ernest, President and CEO of Pennsylvania-based Insurance Agents & Brokers.

"That changes today. Through IntellAgents, we will be providing agents the data points they need to compete better. We are very excited about this partnership."

About IntellAgents, LLC

IntellAgents, LLC is a first-of-its-kind, analytics-driven organization that specializes in actionable insights for independent agents. Founded in 2018 by Ohio Insurance Agents Association, it is the fastest-growing independent insurance data warehouse in the country. IntellAgents products and services are available in Ohio, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, North Carolina, and Pennsylvania. Availability in other states will continue to expand throughout 2019.

About Ohio Insurance Agents Association

Ohio Insurance Agents Association (OIA) is the collective voice of 1,300 independent agencies that employ nearly 10,000 Ohioans. We promote, progress and protect the professional advice and guidance only independent insurance agents provide. OIA members write 82 percent of the commercial insurance policies and 44 percent of personal insurance policies in Ohio. OIA helps agents by providing agency valuation, succession planning, generational health, operational benchmarking reports, other business solutions and industry thought leadership.

In Reversal, Flood Insurance Program Resumes Normal Operations During Shutdown

Last Friday evening, the Federal Emergency Management Agency (FEMA) announced that the National Flood Insurance Program (NFIP) will resume the normal sale of new insurance policies and the renewal of expiring policies.

This order rescinded an earlier decision that halted sales operations by the NFIP because of the current government shutdown and lapse in appropriations.

The reversal came after banking, insurance and political leaders from both parties criticized the halting of sales of new and renewal flood policies. Critics said that FEMA was ignoring the intent of Congress to keep the NFIP operating during a shutdown expressed when on Dec. 21, 2018, it passed legislation that reauthorized the NFIP until May 31, 2019.

Insurance, Banking Groups Balk at Limits on Flood Insurance Operations During Shutdown

Critics also argued that any disruption in sales of flood insurance could hold up real estate closings. “FEMA’s unexpected decision will complicate and delay loan closings for borrowers who are required to carry flood insurance and seek NFIP coverage for as long as the government shutdown continues,” the American Banking Association (ABA) said in a statement earlier yesterday.

FEMA said all NFIP insurers have been directed to resume normal operations immediately and advised that the program will be considered operational since Dec. 21, 2018 without interruption.

Sen. John Kennedy, R- La., a sponsor of the NFIP reauthorization bill, was among the lawmakers trying to get FEMA to restart normal operations.

“It’s taken a lot of phone calls to Washington, D.C., but FEMA finally came around to what I recognized from the beginning. My reauthorization legislation, which was signed by President Trump into law, prevents any disruption to the National Flood Insurance Program,” said Sen. Kennedy.

Rep. Maxine Waters, D-Calif., ranking member of the House Committee on Financial Services, was among those who also urged FEMA to reconsider what she called its “harmful and incorrect interpretation of its authority” and resume its “important work of providing flood insurance.”

This article was originally published by Insurance Journal on December 28, 2018.

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