Big I’s Rusbuldt Blasts Compensation Settlements, Raises Bar on Agent Market Share in IJ Magazine

June 6, 2006

Independent insurance agents who are upset that conditions are being placed on their compensation have an important ally in Bob Rusbuldt, chief executive officer of Independent Insurance Agents and Broker of America, and the “go-to guy” on American Agency System politics.

In an exclusive Insurance Journal interview in which he is asked about recent class action settlements between Zurich Insurance and state attorneys general that dictate compensation disclosure and other conditions, Rusbuldt blasts the moves to make all of Zurich’s agents comply with these settlements.

Exclusive Video Interview
Big ‘I’ Blasts Secret Class Actions; Vows Market Share Growth
(Bob Rusbuldt video interview launches in new window)

“Unfortunately, independent agents are not represented at the table. It was the company and their lawyers and the AGs and some lawyers for insurance regulators, so we found out about this at the same time as everybody else,” he explains. “We are also concerned in the settlement agreements, that when you reach a certain threshold, contingencies go away in those companies. That is a huge problem for a lot of agents and brokers.”

Compensation is just one of the issues discussed in the interview. The “Big ‘I’ Bob Rusbuldt on the Job” story is featured in the June 5 edition of Insurance Journal’s print magazine.

The June 5 edition also contain IJ’s exclusive 2006 Workers’ Compensation Directory, a comprehensive listing of intermediaries and carriers offering workers’ compensation coverage throughout the country, and a new 2006 Digital Product Guide, a listing of technology product-related resources.

In his interview, Rusbuldt also takes on agents’ growing market share.

“We are not candlestick makers, and in fact, now there is a renaissance in the independent agency system,” Rusbuldt says. “Independent agents are growing every year, for eight years, in both commercial lines and personal lines.”

He stresses his determination to see agents gain even more market share. “First of all, it’s my personal goal for our distribution system to get 50 percent market share, and people say, ‘Bob, I think you might be a little optimistic,’ or ‘What are you drinking?’ But the bottom line is that we can do it,” he insists.

A&E market report
In this week’s Insurance Journal magazine, readers will also read Gerald Farquhar, risk management consulting attorney for Victor O. Schinnerer, who takes a closer look at multi-family housing and how agents and their clients can slow the flow of the architects and engineers claims on these projects. According to current claims statistics in the Schinnerer and CNA program, multi-family projects constitute only 4.5 percent of all design fees, but losses from such projects account for 18 percent of the total program losses. When the individual firm’s deductible and the non-billable time spent defending these claims are added to the losses, the resultant total loss is even more severe, writes Farquhar.

Elsewhere in the June 5 magazine, Bruce Lockhart, of RiskProNet International and Dawson Companies in Cleveland, Ohio, writes that despite 10 to 20 percent drops in professional liability insurance there has been only a slight downward trend for engineers and architects. He maintains that the overall market for engineers and architects is neither hard nor soft.

Regional editions
Unique among insurance publications, Insurance Journal regionalizes the content of its magazines to serve readers in five regions of the country. The June 5 regional editions tackle everything from recent Mississippi and Louisiana court opinions on hurricane claims and New Hampshire’s plan to lure insurers with a premium tax cut to a progress report on Texas workers compensation reforms and one editor’s view on motorcycle helmets.

Controversial New Mexico’s Insurance Superintendent Eric Serna has agreed to retire as part of a settlement approved by the state’s Public Regulation Commission. He is being investigated by the Attorney General for his dealings with a bank that does business with the state insurance department. Editor Patricia-Anne Tom has the Serna story in this week’s West edition.

Tom also reports on California Insurance Commissioner John Garamendi’s allegations that insurers are seeing “excess profits” and his plans to investigate.

In other news, the West edition finds California workers’ compensation reforms that were implemented in 2002 have created more market competition and choice, and improved predictability in the system, but some groups would like to roll back reforms and change the permanent disability rules.

The Southeast edition of IJ magazine for June 5 weighs the suggestion from Len Brevik, CEO of the National Association of Professional Insurance, that Florida’ latest property insurance bill could be a model for a national program.

The Southeast edition also reviews recent court opinions flowing out of Louisiana and Mississippi hurricane litigation. The cases have raised a number of concerns about applicability of flood exclusions, wind versus water and insurance agents’ potential liability.

Southeast Editor Dave Kaiser also reports from the National Council on Compensation Insurance Annual Issues Symposium in Orlando, Fla., where industry economist Robert P. Hartwig said that the industry is now in a “period in which premium growth is grinding to a halt.”

South Central
The Texas/South Central edition examines claims complaints in Louisiana stemming from Hurricanes Katrina and Rita that have prompted an investigation by the insurance department into the claims handling practices of St. Paul Travelers and Allstate. Next up for scrutiny is Citizens Property Corporation, the state’s property insurer of last resort, and the department says other insurers may come under review as well.

Due to hurricane losses last year, Allstate, the number two homeowners insurer in Texas, said it plans to drop windstorm coverage for coastal counties in that state and move its policyholders’ windstorm coverage to the Texas Windstorm Insurance Association. Editor Stephanie Jones reports on that and the news that Allstate was also ordered to cut homeowners rates and refund customers for overcharges stemming from 2004.

Jones also gets Texas Workers Compensation Commissioner Albert Betts to share his views on how workers’ compensation reform is shaping up in Texas.

New Hampshire is going the tax cut route to attract insurance jobs. Lawmakers have passed a plan to cut in half the state’s two percent tax on insurance premiums over the next four years, making it the lowest in the New England and mid-Atlantic states. That’s one of the reports in the June 5 East edition.

While medical and litigation expenses are causing workers compensation insurers’ costs to creep up in the Northeast, there are some positive signs amid the claims trends for insurers and injured workers in several key states, the East edition also reports.

Even as New England mops up from May’s floods, the region is being warned not to view the upcoming hurricane season with complacency. After years of the Gulf and Southeast coasts feeling the brunt of hurricanes, this could be the year when the Northeast gets whacked. IJ East reports on the Northeast hurricane forecasts and the flood aftermath.

Editor Andy Simpson also opines on how to find evidence of competition where very little exists.

With the warmer summer weather bikers will be on the roadways in Michigan and neighboring states in record numbers. With more people traveling, safety on the roads should be a priority, yet the state of Michigan has enough votes to repeal its 37-year-old mandatory helmet law. Why? What would motivate state legislators to eliminate a law that has saved lives and prevented serious injuries after 37 years? Editor Sue McKenna offers an answer in the Midwest edition.

McKenna also reports on why almost 25 million U.S. families renting their homes are going bare on insurance coverage, leaving themselves vulnerable to serious property and liability losses.

She also takes a look at whether Midwest cities have safe drivers, using a new Allstate survey.

The June 5 edition of Insurance Journal magazine is available this week.

The complete video interview may be viewed on Insurance Journal Web site at

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