New name reflects changing times

Rough Notes, Jul 2002 by Zinkewicz, Phil

IIAA becomes the Independent Insurance Agents and Brokers of America

For businesses in the services sector of the economy-including insurance agents and brokers-things are changing at a very fast pace these days. Sometimes it's difficult for services firms to come to grips with who they really are and whom they really represent. The financial services deregulation law that came into effect in December 1999 has something to do with the confusion. With that law came the breakdown of barriers between the financial services sector-barriers that separated banking activities from insurance activities and securities activities. Cross-border mergers began to take place following the passage of the Gramm-Leach-Bliley Act (GLBA)-not with the speed analysts had predicted, but they took place nonetheless.

Banks began to acquire insurance agencies, preferring to move into the insurance business via its distribution system rather than on the underwriting end and, due to the influx of new capital, caused the agencies to grow as a result. Large insurance brokers began swallowing up smaller agencies, and even the definitions of agents and brokers became blurred.

It is not surprising, therefore, that the former Independent Insurance Agents of America (IIAA), based in Washington, D.C., recently decided to change its name to the Independent Insurance Agents and Brokers of America (IIABA). The association made the announcement on April 15, 2002, saying that the move was "unanimously recommended by the association's National Board of State Directors during its meeting in January."

"The change was driven by our members," said IIABA CEO Robert A. Rusbuldt. "We are an organization that represents the interests of member businesses of all sizes-from the smaller independent agencies to the largest agencies and brokerage firms in the country. The new name now matches the mission of the Association, which is to advocate on behalf of all independent agents and brokers."

IIABA President Thomas B. Ahart, of the Phllipsburg, New Jersey-based Ahart, Frinzi and Smith, called the name change "a positive step for all independent agents and brokers." He said: "It conveys the reality and broad change of today's national association. Through this change, we highlight the important role of large agents and brokers in our association and place a spotlight on the advocacy work we do on behalf of the largest agents and brokers."

It was perhaps that last phrase, containing the word "largest," that did not sit well with The Council of Insurance Agents and Brokers (CIAB), also based in Washington, D.C. Just two days after the IL4,BA's announcement, John Van Osdall, CIAB chairman, issued the following terse statement regarding the IIABA name change: As the 2002 chairman of The Council of Insurance Agents and Brokers, I am hopeful that the decision to broaden the name of the Independent Insurance Agents of America (to the Independent Insurance Agents and Brokers of America) will broaden that association's public advocacy positions to reflect the issues, which are of concern to large insurance agencies and brokerage firms. Of course, this decision is made against the backdrop of continued consolidation and convergence of the property/casualty agency/brokerage business. The name change is an understandable reflection of this trend," he said.

But Osdall continued: "As IIABA more explicitly embraces the concerns of larger commercial brokerages, I hope that the stark differences that have defined the two organizations can be bridged.

"For example, we strongly support broad deregulation of commercial lines, whereas individual IIAA affiliates have blocked commercial lines deregulation efforts in many states. On the agent/broker licensing issue, The Council has aggressively led reform efforts. But the promises of NARAB have not been fully realized due to the efforts of several IIAA affiliates to reject full interstate agent/broker licensing reform," said Osdall. "The Council works hard to overturn anti-- competitive countersignature laws; IIAA has protected such onerous statutes despite a formal position of opposition. The Council has historically supported an optional national charter for property/ casualty carriers; IIAA has not. The Council welcomes bank members and does not support the continued, tired battle against the Officer of the Comptroller of the Currency and national banks. There are a variety of international taxation and captive insurance company issues where IIAA's involvement would be new and welcome."

Osdall's statement concluded: "Our association membership standards at The Council are limited and high. As of July 1, we will raise the bar for membership qualification, from a minimum of $2.5 million in revenues to $4 million. This move will keep our association true to its 69-year tradition of representing only the top one percent of all brokers in the industry-a group that places more than 80% of all commercial P-C insurance premiums. As consolidation continues among the IIABA's much broader-based membership, we expect firms will emerge who will meet the basic standard for The Council's membership. And, if and when they do, we will welcome them into the tailored, responsive and individualized association services, which form the bedrock upon which The Council is built."