Agents' feedback

Rough Notes, May 2000

Clarifying regulation of courier services

One of our California members directed my attention to an article that appeared in your November 1999 issue of Rough Notes, titled "Courier/messenger services provide a solid niche."

The article was informative and, for the most part, an accurate reflection of our industry. However, your readers may want to know that messengers and couriers are not required to meet performance and safety requirements set forth by the Interstate Commerce Commission. The ICC ceased to exist in 1995. The safety oversight functions of that agency had been transferred to the Federal Highway Administration in 1967.

With the demise of the ICC, the Federal Highway Administration was also made responsible for licensing of motor carriers, including messengers and couriers, who engage in interstate commerce. One of the requirements for licensing is to provide evidence of financial responsibility, generally in the form of liability insurance at or above established minimum levels.

Most messengers and couriers operate vehicles that have a gross vehicle weight rating (GVWR) of less than 10,000 pounds, and are not subject to the Federal Motor Carrier Safety Regulations (FMCSRs). For them, there is no "regular inspection of delivery vehicles" as was asserted in the article. If a company does operate some vehicles that are subject to the FMCSRs, only those vehicles would be subject to periodic inspection.

In California, firms operating within the state must also obtain a Motor Carrier Permit from the Department of Motor Vehicles (DMV). Before issuance of the permit, however, the messenger/ courier firm must provide evidence of financial responsibility and workers compensation insurance.

Some small companies attempt to skirt the requirement for workers compensation insurance by claiming that their drivers are independent contractors. To legally function as an independent contractor in California, however, the driver would need his/her own Motor Carrier Permit issued by DMV Few of them have such a permit and are either operating illegally as independent contractors or are employees, for which the employer has not secured the required workers compensation coverage.

-Ronald C. Broberg

Executive Director

Association of Messenger

and Courier Services

(AMCS) of California

Big `.I" markets program provides e-choices

I very much enjoyed the article "The Hartford's Personal Lines Commitment to Agents" (February 2000 issue) except for its mischaracterization of the Independent Insurance Agents of America's (IIAA) Big "I" Markets program.

Big "I" Markets is more of an opportunity for both independent agents and managing general agents than a threat. Its overarching goal is to increase consumer access to products and services through IIAA agencies by using e-commerce capabilities in a new and exciting way.

There is a fundamental difference between The Hartford-Ford joint marketing arrangement and Big "I" Markets. The latter will increase consumer access to products and services through IIAA agencies, while the former bypasses agents altogether. Understandably, this is a big difference to our members.

Independent agents are synonymous with choice. Big "I" Markets is about providing a leadingedge technology choice for independent agents to more efficiently place business with managing general agents, managing general underwriters, and insurers alike.

In today's changing business and technological paradigm, associations must be progressive to add value to their members. For agents to prosper in the future, they must embrace e-commerce and the near limitless business prospects presented by the Internet. Through Big "I" Markets and the Association's many other technology initiatives, IIAA is striving to lead its members to this new, uncharted area.

-Paul A. Equale

CEO

Independent Insurance

Agents ofAmerica