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Tampa 2006 – Where the Industry Comes Together

NAMIC's 111th Annual Convention

111th Annual Convention
Sept. 17-20

Tampa Convention Center
Tampa, Fla.

Robert A. Wadsworth, CPCU, CIC
2005-2006 NAMIC Chairman
Convention Speech – Tampa, Florida

It’s hard to believe that nearly a year has passed since I stood before you as the newly-elected chairman of NAMIC. This has been an amazing year, during which I have had the opportunity to work with an extraordinarily competent group of insurance professionals – the membership and staff of NAMIC:

  • Who devote countless hours and resources to ensure that we not only maintain, but improve the quality of the industry in which we work and live.
  • Who lead and drive the critical initiatives of our industry, ever mindful of the spirit upon which our industry was founded… “Bear ye one another’s burdens.”

Having had the opportunity to serve you – the NAMIC membership – in this capacity – is an honor that I will always appreciate, treasure and remember fondly. I thank for your vote of confidence. During the year, I have had the privilege of traveling across the U.S. and Canada, seeing firsthand the dedication and drive of many state and provincial associations and learning about the different ways you work to ensure the success of your companies.

I would like to thank all of you for your guidance, support and hospitality. A special thanks is extended to the NAMIC board of directors, the NAMIC staff, and to all of you who volunteer your time and talent to the many NAMIC committees and special conferences.

I would be totally remiss if I did not thank my wonderful wife Ronnie, who has been so very understanding of my travel schedule, and who has accompanied me on several of my trips.

I also am grateful to my executive staff for their extraordinary efforts and leadership while I was away from the office and to my board of directors for supporting me in this endeavor.

During these past eleven months, we have met and talked together about leading our industry forward…to seize opportunity and challenge adversity and to take charge of the course of our future and our destiny. I am happy to say we have had much success.

NAMIC’s mission statement outlines three areas of critical importance to our member companies: advocacy – public policy – and member services. We take pride in the successes we have experienced this year and in all of our efforts to advance and protect our collective interests as an industry.

In my role as chairman I have witnessed first-hand the remarkable headway that has been made in securing the health and prosperity of the property and casualty insurance industry. This is due, in large part, to the members of this great organization as well as its loyal and talented staff.

Whether you participate in the NAMIC Congressional Contact Program, contribute to the NAMIC PAC, or heed the call of a NAMIC legislative alert by taking personal action on an issue, you are proactively making a difference, and your efforts reinforce the very essence of our association and significance of our industry.

NAMIC was vigorously engaged in legislative challenges this year. As you know, congress did not approve an extension of the terrorism risk insurance act until shortly before it was scheduled to sunset in December 2005. Since the moment TRIA was originally enacted in 2002, NAMIC has been actively engaged in efforts to develop a long term solution to the terrorism exposure. That effort continues.

After two years of focused and dedicated work by NAMIC staff and members on small company tax reform, the IRS saw the logic in our point of view and agreed that the definition of “gross receipts” should be changed. This was a significant victory for smaller farm mutual companies that serve an important role in our industry and in our communities. NAMIC is now working on a follow up effort to expand the small company exemption for our members and build on the tax reform already accomplished.

NAMIC has achieved a great victory in opposing the unnecessary application of Sarbanes Oxley act provisions to mutual insurers through the naic model audit rule. Now, NAMIC will continue to work with members in each state as their legislators consider adopting the much watered down NAIC proposal. As one of baseball's greatest champions, Yogi Berra, said: "it ain't over 'til it's over." time and again, NAMIC has reminded those who regulate the industry that congress never intended that the Sarbanes Oxley act apply to non-public entities, including mutual insurers.

Each year more than one hundred and fifty thousand legislative bills are introduced throughout the united states, with about thirty thousand becoming law. Staying on top of these new laws from a compliance standpoint is critical. This past December, NAMIC partnered with StateNet to provide a legislative and regulatory information service – LARIS – free to NAMIC members. LARIS allows NAMIC members to stay in tune with state and federal actions. I encourage you to take advantage of this valuable service if you have not already done so. Often times, legislation benefits the mutual insurance industry, but we’ve had to deal with some nonsensical legislation as well.

For example, following hurricanes Katrina and Rita, a bill was introduced in Louisiana that would have required insurance companies to pay claimants for damages not covered by their policies. The very idea of such a bill becoming law is a travesty. Thankfully, the bill did not pass.

NAMIC’s state affairs managers, located throughout the united states, often work in concert with the federal affairs staff on capitol hill to benefit NAMIC members. Whether preparing members for testimony or testifying themselves, crafting statements or keeping tabs on emerging issues, these talented NAMIC staff members are helping us to create a future that allows each one of us to own our destiny.

This association focuses on providing bottom-line value for you – the NAMIC members. Sometimes it is easy to quantify that value – such as the benefits to many members of achieving small company tax reform or the costs many of you avoided by successfully opposing the original NAIC effort to impose Sarbanes Oxley on mutual companies. At other times it is not as easy to quantify since many of our efforts produce subtle but important changes that occur over long periods of time. Even the little victories along the way add up to big wins in the future.

Again this year, the national oceanic and atmospheric administration predicted an active hurricane season and urged those living in hurricane prone areas to be prepared. Truthfully, no one knows what areas of the coast, or which states or locations within those areas, if any, will be impacted by hurricanes. But in 2005, we saw all too vividly the destruction and devastation wrought by hurricanes. As always, our industry stands ready to provide the protection that will continue to help our policyholders rebuild after devastating covered losses.

For some, these circumstances appear to provide primarily political opportunity. Last year, Jim Hood, Mississippi’s attorney general, made an outrageous and ludicrous comparison of the insurance industry to Nazi-ism when discussing what he termed the industry’s “atrocities” in handling claims in the aftermath of hurricane Katrina.

Yet, interestingly enough, a survey conducted in early April by Stratalys research found that 89 percent of homeowners in Mississippi and Louisiana were satisfied with their homeowners insurance. The study also found that three-quarters of homeowners who filed Katrina-related claims were satisfied with the way the claims were managed by their insurance companies.

And it’s in that research that we find the truth –who better to ask than our policyholders? Every single day our companies fulfill their promises and our industry admirably provides the financial safety net that enables individuals, businesses and institutions to take risks, to be pioneers; and, ultimately, to succeed.

Even with the devastation still apparent in the areas hit by last year's killer storms, a few months ago, my home state of New York, and parts of the northeast United States, faced massive flooding. Disaster and loss come in many forms and NAMIC member companies stand ready to honor the promises made to policyholders.

We’ve made tremendous strides this year, but we’re far from finished. We still have challenges ahead such as continuing to oppose an optional federal charter, crafting reasonable legislation to address the asbestos litigation situation, expanding the small company tax exemption, and once and for all, achieving meaningful tort reform. NAMIC members will continue to band together, build consensus on these issues, and carry the industry forward.

It’s long been my belief that we build strong organizations when we take an active role in preparing and molding the next generation of leaders. NAMIC members do not have to undertake this task alone or reinvent the wheel when it comes to educating your staff. Every year, NAMIC hosts educational events and conferences that exceed the expectations of a majority of attendees. Soon those events will expand to include education for boards of directors; a basic claims adjusting school; and programs for chief financial officers. Adding these new programs will help you address the various educational needs of your company and the generational preferences of your staff.

In insurance services, NAMICO continues its success as a provider of professional liability and D&O insurance to the majority of NAMIC member companies. However, NAMICO also makes available fidelity and fiduciary liability protection to members. In addition it is pursuing new growth strategies such as agent’s E&O insurance.

NAMIC’s compensation and benefits survey report provides information to help attract and retain high-quality personnel. NAMIC partners with the ward group to provide discounted benchmarking services to NAMIC members. This year, the ward group has developed special product and pricing options for smaller companies so the benefits of benchmarking are affordable to all.

My theme, “create the future…own your destiny” was inspired from the teachings of the FranklinCovey institute.

I consider Stephen Covey a mentor and believe his advice to be applicable universally. Tomorrow, Hyrum Smith will speak at our general session and he is the co-founder of Franklin Covey and author of "What Matters Most" and "The 10 Natural Laws of Successful Time and Life." I suggest strongly you attend the general session. You won't regret it.

An idea fully embraced by FranklinCovey is to begin with the end in mind. In other words, we can sit around and watch to see how things “work themselves out” or we can decide what it is that we want and plan our specific steps accordingly to achieve our goal. No one else can ultimately determine our fate if we take active ownership of our destiny.

William Jennings Bryan, a congressman from Nebraska, three-time presidential candidate, and later the secretary of state under president Woodrow Wilson, embraced this idea as well. He said, “Destiny is not a matter of chance; it is a matter of choice. It is not something to be waited for, it is a thing to be achieved.”

Thank you for your faith in my ability to lead this fine organization.

Thank you for allowing me this unique opportunity.

And thank you for choosing to achieve success, which made this year profoundly successful in determining our future.

Thank you.

Posted: Tuesday, September 19, 2006 12:00:00 AM. Modified: Friday, October 27, 2006 10:02:46 AM.

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