An Open Letter to the Insurance Industry Seeking Assistance for Independent Agents Devastated from Hurricane Katrina

September 20, 2005

Independent insurance agents in Southeast Louisiana and South Mississippi face a daunting task as they play their part in rebuilding their shattered communities. They will need the help of the insurance companies whose products they sell to survive, rebuild their agencies, and serve the overwhelming needs of policyholders.

The Independent Insurance Agents & Brokers of America, Louisiana, and Mississippi recognize that there are enormous needs to be met and challenges to be overcome in order for agents and those affected so harshly by Hurricane Katrina to build a bright future. IIABA, IIABL, and IIAM would like to begin and maintain a dialog with independent agent insurance companies, insurer trade associations, vendors, and other interested parties to facilitate the assistance critical to the personal and business recovery of all affected independent insurance agents.

Some specific issues which should be addressed include the following:

1. Hurricane Katrina generated what many consider to be the most serious problem for independent agents – business interruption related to storm surge and flooding. Very few independent agents have business interruption insurance coverage for floods. Because of the massive scale of flooding and storm surge damage, and the widespread evacuation in some areas, payment of renewals for insurance policies will likely be somewhat chaotic for the next several months in the affected areas. We urge insurance companies to provide agents with flexibility in agency bill account current renewal payments so that agents do not get caught in an untenable position between devastated insureds facing overwhelming obstacles and insurance companies. We also suggest that insurers consider paying some reasonable percentage of renewal commissions to agents during the emergency moratorium, so that agents are not further harmed while the renewal accounting is sorted out.

2. Some agencies will have to go through expensive rebuilding efforts. We ask insurers to consider creative ways to offer qualified agencies low interest financing.

3. We ask that carriers who have office furniture not in use, or that have volume discount arrangements with furniture and equipment providers, to offer affected agents the opportunity to purchase furniture and equipment through them at a reduced cost.

4. In a catastrophe of this magnitude, serious coverage and claims administration issues can be expected to arise. Agents will be on the front line dealing with desperate insureds. We ask independent agent insurance companies to establish expedited claims appeals procedures which allow agents to effectively work with all involved in an effort to get any such disputes resolved as quickly as possible.

5. We ask that vendors have flexibility about restructuring time frames for payments due on systems, software, and services in this time of unprecedented destruction, and provide resources and business tools to affected agents at reduced rates.

We are grateful that many insurers have expressed a desire to assist their independent agent partners. In this desperate time of need, we ask independent agent insurance companies, insurer trade groups, vendors and others to work with us to help agents through this difficult time so that we may focus on building a bright future together.

Please feel free to contact any of us to discuss how we can achieve this goal together.


Bob Rusbuldt
Chief Executive Officer
Independent Insurance Agents & Brokers of America

Jeff Albright
Chief Executive Officer
Independent Insurance Agents & Brokers of Louisiana

Clinton Graham
Executive Vice President
Independent Insurance Agents of Mississippi

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