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Special Report: Life in the PIA Western Alliance States

Posted By PIA Western Alliance, Tuesday, January 24, 2017


Life is good in the nine PIA Western Alliance states. In fact, it’s so good in Oregon, Washington, California, Montana, Idaho, Nevada, New Mexico, Arizona and Alaska that five of the states are in the nation’s top 10 destinations for those looking to relocate.




Here’s the top-10 list according to United Van Lines’ 40th Annual National Movers Study. The PIA Western Alliance states are in bold:


1.    South Dakota

2.    Vermont

3.    Oregon

4.    Idaho

5.    South Carolina

6.    Washington

7.    District of Columbia

8.    North Carolina

9.    Nevada

10. Arizona


When something goes up, science says something also goes down. No PIA Western Alliance states are in the top-10 states where people are leaving:


50. New Jersey

49. Illinois

48. New York

47. Connecticut

46. Kansas

45. Kentucky

44. West Virginia

43. Ohio

42. Utah

41. Pennsylvania


The report said the PIA Western Alliance state of Oregon has been the top draw for the last three years. This year South Dakota overtook the Beaver State and so did Vermont. But barely.


United Van Lines said a huge percentage of those moving are retirees and they like the mountains of the West and the Pacific Northwest. How popular is the West? Here are some staggering numbers on the inbound wish list:


  67% find Oregon the most popular

  65% love Idaho

  58% find Washington a target

  58% like Nevada

  57% pick Arizona


Of those moving West, Oregon picked up 53% of new jobs and transfers and 19% of the retirees.


Michael Stoll is an economist at the Department of Public Policy at the UCLA. He looked at the survey and said, “This year’s data clearly reflects retirees’ location preferences. We are seeing more retirees than ever decide to relocate, and as a result, new retirement hubs are popping up in Western states. Interestingly enough, these retirees are leaving at such a fast pace that the movement of millennials to urban areas in the Midwest and Northeast is being overshadowed.”


As noted, some states are growing population and some states are losing population. The report also notes that three are just staying even. United Van Lines calls them “balanced.” Two of the three are PIA Western Alliance states and are in bold:



  New Mexico



Just because people are moving to certain states that doesn’t necessarily make them the best states in which to reside. Or so says a survey released in November last year by 24/7 Wall St. In fact, one PIA Western Alliance state — New Mexico — is on the 24/7 Wall St. survey worst state list and none of them are on the best list.


The closest any PIA Western Alliance state could get to the top 10 is Washington at number 11. Five of the nine states are below average and four above with one of them — Oregon — barely.


We — the people — tend to rate our state of domicile based on:


  Climate preference

  The presence of friends and family

  Personal history

  Life satisfaction


24/7 Wall St. looks at things a bit differently and has three criteria:


  Poverty rate

  Educational attainment

  Life expectancy at birth


The 10 worst:


50. Mississippi — the nation’s highest poverty rate and lowest life expectancy

49. West Virginia

48. Louisiana

47. Arkansas

46. Alabama

45. Kentucky

44. Oklahoma

43. Tennesse

42. New Mexico

31. South Carolina


The 10 best:


1.    Massachusetts — Two out of every five adults has at least a bachelor’s degree. The Poverty rate sits at 11.5% and is less common than most other states. With a great economy, the state also has a health state and a life expectancy averaging 80 years.


2. Connecticut

3. New Hampshire

4. Minnesota

5. New Jersey

6. Colorado

7. Vermont

8. Maryland

9. Hawaii

10. Virginia


The PIA Western Alliance states


42. New Mexico


  10-yr. population growth: 10.5% — 25th highest

  Oct. unemployment rate: 6.7% — 2nd highest

  Poverty rate: 20.4% — 2nd highest

  Life expectancy at birth: 77.9 years — 18th lowest


38. Nevada


  10-yr. population growth: 21.4% — 4th highest

  Oct. unemployment rate: 5.5% — 9th highest

  Poverty rate: 14.7% — 23rd highest

  Life expectancy at birth: 77.9 years — 17th lowest


32. Arizona


  10-yr. population growth: 17.1% — 10th highest

  Oct. unemployment rate: 5.2% — 14th highest

  Poverty rate: 17.4% — 8th highest

  Life expectancy at birth: 79.3 years — 15th highest


31. Idaho


  10-yr. population growth: 18.6% — 8th highest

  Oct. unemployment rate: 3.8% — 10th lowest)

  Poverty rate: 15.1% — 20th highest

  Life expectancy at birth: 79.0 years — 21st highest


29. Montana


  10-yr. population growth: 13.4% — 21st highest

  Oct. unemployment rate: 4.3% — 19th lowest

  Poverty rate: 14.6% — 24th highest

  Life expectancy at birth: 78.3 years — 24th lowest


24. Oregon


  10-yr. population growth: 13.2% — 22nd highest

  Oct. unemployment rate: 5.3% — 13th highest

  Poverty rate: 15.4% — 17th highest

  Life expectancy at birth: 79.1 years — 17th highest


20. Alaska


  10-yr. population growth: 15.1% — 17th highest

  Oct. unemployment rate: 6.8% — the highest

  Poverty rate: 10.3% — 5th lowest

  Life expectancy at birth: 77.8 years — 15th lowest


15. California


  10-yr. population growth: 11.0% — 24th highest

  Oct. unemployment rate: 5.5% — 9th highest

  Poverty rate: 15.3% — 19th highest

  Life expectancy at birth: 80.4 years — 3rd highest


11. Washington


  10-yr. population growth: 16.7% — 11th highest

  Oct. unemployment rate: 5.4% — 12th highest

  Poverty rate: 12.2% — 17th lowest

  Life expectancy at birth: 79.6 years — 11th highest


It’s the very rare occurrence when someone moves to a new city or state without a job. Or at least the prospect of a job. 24/7 Wall St. also released a job survey in November of last year and a bunch of PIA Western Alliance states Six PIA Western Alliance cities are in the top 10 highest job growth cities and 10 of them are in the top 20.


The economic and financial publication compared job growth between October 2015 and October 2016 to come to its conclusions:


23. Eugene, Oregon


  Employment change: 4.44%

  No. of jobs Oct. 2015: 162,780

  No. of jobs Oct. 2016: 170,006

  Unemployment rate Oct. 2016: 5.5%


17. Seattle-Tacoma-Bellevue, Washington


  Employment change: 4.67%

  No. of jobs Oct. 2015: 1,879,827

  No. of jobs Oct. 2016: 1,967,536

  Unemployment rate Oct. 2016: 4.4%


13. Grants Pass, Oregon


  Employment change: 5.06%

  No. of jobs Oct. 2015: 30,906

  No. of jobs Oct. 2016: 32,471

  Unemployment rate Oct. 2016: 7.0%


12. Medford, Oregon


  Employment change: 5.10%

  No. of jobs Oct. 2015: 91,343

  No. of jobs Oct. 2016: 96,006

  Unemployment rate Oct. 2016: 6.3%


10. Albany, Oregon


  Employment change: 5.20%

  No. of jobs Oct. 2015: 50,990

  No. of jobs Oct. 2016: 53,641

  Unemployment rate Oct. 2016: 5.8%


9. Portland-Vancouver-Hillsboro, Oregon/Washington


  Employment change: 5.21%

  No. of jobs Oct. 2015: 1,171,041

  No. of jobs Oct. 2016: 1,232,021

  Unemployment rate Oct. 2016: 5.0%


5. Salem, Oregon


  Employment change: 6.01%

  No. of jobs Oct. 2015: 179,402

  No. of jobs Oct. 2016: 190,190



  Unemployment rate Oct. 2016: 5.4%


4. Prescott, Arizona


  Employment change: 6.57%

  No. of jobs Oct. 2015: 92,552

  No. of jobs Oct. 2016: 98,637

  Unemployment rate Oct. 2016: 4.7%


3. Yuma, Arizona


  Employment change: 6.81%

  No. of jobs Oct. 2015: 72,473

  No. of jobs Oct. 2016: 77,407

  Unemployment rate Oct. 2016: 18.4%


1. Bend-Redmond, Oregon


  Employment change: 7.63%

  No. of jobs Oct. 2015: 80,446

  No. of jobs Oct. 2016: 86,587

  Unemployment rate Oct. 2016: 5.2%


Source links: United Van Lines, MSN Money



Tags:  Insurance Content  Insurance Industry  Insurance News  Special Report: Life in the PIA Western Alliance S  Weekly Industry News 

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Insurance Employment 2017

Posted By Administration, Tuesday, January 24, 2017

The industry is desperately worried about replacing the plethora of experienced insurance professionals that will retire this year. The loss of experience and know-how alone is frightening. Also of concern is the growing workload. As an industry, we’re all — or at least a huge percentage of us — are at job overload.


Many are begging bosses and managers in all walks to ease our burdens.


Don’t look at 2017 to be the year your pleas are heard. A survey from Pricewaterhouse Coopers (PwC) — who polled 1,379 CEOs in 79 countries — says:


  Just 41% said they’ll be adding personnel


That’s down from 49% saying they’d add staff in 2016 and 50% in 2015. The 2014 figure was 59%. Also, disconcerting — to employees that is — is the downward hiring trend when the growth outlook for insurance is getting brighter.


  38% of CEOs are very confident of short-term revenue growth in 2017

  That’s up from 35% in 2016


That’s not all:


  79% have organic expansion at the top of the planning for 2017

  41% are going to do seek mergers and acquisitions this year

  23% want to strengthen innovation capability to capitalize on new opportunity


PwC’s Bob Moritz who is the firm’s global chairman said, “Despite a tumultuous 2016, CEO confidence is moving back up — albeit slowly and still a long way from the levels we saw back in 2007. But there are signs of optimism right across the globe, including in the UK and US, where despite predictions of a Trump slump and a Brexit exit, CEOs confidence in their company’s growth are up from 2016.”


Source link: Insurance Business America



Tags:  Insurance Content  Insurance Employment 2017  Insurance Industry  Insurance News  Weekly Industry News 

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California Commissioner: Sticking it to State Farm

Posted By Administration, Tuesday, January 24, 2017

 Dave Jones


California Insurance Commissioner Dave Jones has issued a noncompliance notice to State Farm and — if it goes through — it’s going to be expensive. This all comes from a December of last year order when Jones told the company to cut rates for homeowners and renters.


All this came about after the company asked for a 6.9% hike. Jones said the 6.9% is excessive and said reductions, not increases are in order. So, he told State Farm to drop rates for:


  Homeowners by 5.37%

  Renters by 20.39%

  Condominium by 13.81%


The cuts save $84 million for policyholders. Jones also instructed State Farm to issue refunds so the total of the reductions and refunds hit $110 million.


In December State Farm tried to get a San Diego Superior Court judge to stay the order for the reductions. The court refused and said delaying is against the public interest. So, the rate reduction is a go.


Kind of.


State Farm told the commissioner’s staff that it will not implement the rate reduction order immediately. It will happen on February 13th of this year.


In a statement, the company said, “State Farm believes it is in full compliance with the California Department of Insurance rate making process. We took immediate steps to comply with the rate reduction after receiving the ruling of the trial court over the weekend of December 16. The new reduced rates currently are and, after that weekend, have been included in outgoing renewal bills, which must be sent out by law at least 45 days in advance.”


Jones’ original order was on December 6, 2016. The court said no on December 16th.


The pace of the State Farm’s compliance is not sitting well with Jones. He has proposed fines that could top $2.5 billion. The commissioner has sent legal notice to State Farm stating it faces a $10,000 penalty for each act of overcharging of policyholders.


Source link: Insurance Journal, Insurance Business America



Tags:  California Commissioner: Sticking it to State Farm  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Marsh: Yet One More List of Prognostications for 2017

Posted By Administration, Tuesday, January 24, 2017

Last week Marsh U.S. Casualty Practice issued its 2017 predictions in a report called The U.S. Casualty Insurance Market in 2017: 10 Trends to Watch. The focus is more technology than anything.


Marsh says the main thing insurers are going to take notice of in 2017 is the Internet of Things or IoT. Consumers are increasingly purchasing items that have that all important “connectivity” and insurers are also growing more interested in what can be done with the concept to boost profitability.


In the report, Marsh put it in perspective. “As the world becomes more interconnected, the boundaries blur between traditional product liability and cyber insurance. In 2017, we can expect to see more unintended consequences from the IoT — leading insurers to ask more questions about their own risk aggregation and possibly change the way they provide coverage for risks associated with connected devices,” the report said.


Internet of Things stretches from cameras in the home of insureds to smart refrigerators to the ability to open a garage door by remote. For insurers, its telematics and usage-based insurance.


Both — Marsh’s report added — have unintended consequences. And that’s because “the level of interconnectedness amplifies the potential frequency and severity of adverse events as the impact of an individual loss can ripple through an entire connected system.”


To make its point, Marsh pointed out that we’ve already heard of websites being shut down for hours and problems people have found with their Internet connected cameras, smartphones, routers and printers.


Other predictions:


  Insurers will develop policy language and endorsements to address how commercial/personal lines policies can handle evolving risks. As an example: drones and self-driving cars.

  A more aggressive marketplace that is increasingly competitive will force insurers to focus on underwriting discipline for profits rather than premium growth.

  Technology advances in autos — like self-driving vehicles — and other areas will force insurers to address coverage gaps in polices for those areas.

  Look for interest rates to impact insurers and push rates higher.

  Loss ratios, analytics and claims handling will improve because of advances in technology.

  Clients will look at differences in coverage approaches more so than price.


Source link: Insurance Journal



Tags:  Insurance Content  Insurance Industry  Insurance News  Marsh: Yet One More List of Prognostications for 2  Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, January 24, 2017

California — Ethics Committee Appointee

 Deborah Whitcomb is a workers’ compensation administrative law judge in Stockton, California. She’s the newest member of California’s Workers’ Compensation Ethics Advisory Committee.


She’s replacing the position on the committee for an administrative law judge and replaces Tim Haxton. The other committee members — by law — are from organized labor, insurers, self-insured employers, an attorney who has practiced before the Workers’ Compensation Appeals Board (WCAB) and an attorney who has practiced before an appeals board and so on.


The committee reviews ethics complaints filed against administrative law judges and then makes recommendations to the DWC court administrator.


Source link: Insurance Journal



Idaho — Director Cameron & the NAIC

 The National Association of Insurance Commissioners (NAIC) has announced its 2017 committee chairs and vice chairs. Idaho Department of Insurance Director Dean Cameron was named as Vice Chair of the Life Insurance and Annuities Committee.


“The NAIC’s membership base is filled with great depth of experience,” said Ted Nickel, NAIC President. “Our 2017 committee leadership aligns talent and expertise, putting us in position to pursue and advance this year’s initiatives.” The NAIC acts as a forum for the creation of insurance model laws and regulations.


Director Cameron was elected Secretary of the NAIC Western Zone last fall. “I am honored to represent Idaho and the western zone in these positions,” said Cameron. “This is an opportunity to have a voice in decisions that are made and ensure that we are represented well on committees.”


Cameron was appointed Department Director by Governor C.L. “Butch” Otter in June 2015. Cameron worked in the insurance industry for 26 years and served 24 years in state government, including eight terms as Chair of the Senate Finance Committee and Co-chair of JFAC, the state’s budget committee.



Montana — Legislature Looks at Cell Phones

 A bill has been introduced in the Montana Legislature to keep local governments from banning talking or texting on smartphones while driving. Great Falls Republican Rep. Jeremy Trebas said the bans have not resulted in fewer crashes or insurance claims.


Institute for Highway Safety spokesman Russ Rader agreed and said the bans have not changed behavior and his institute has not found any evidence that they reduce crashes. 


Ten Montana cities ban texting or talking but the state does not have a ban.


Source link: Insurance Journal



Oregon — Oregon Conferment

 Weekly Industry News missed this one and want to make sure to make notice of the success stories and hard work of the participants.


The 2016 Oregon Conferment Luncheon and Ceremony was held on Wednesday, November 2 in Portland. Approximately 70 people attended the ceremony in support of their peers in the insurance industry and their accomplishments.


Congratulations to those that have earned their designations, scholarships and the new CSR of the Year.


CIC Designees in Attendance



Katherine F. Burkey, CIC, AIS

Tamara S. Doryland, CIC, CPIW, AINS, API

Bryce Eckles, CIC

Lori M. Farrell, CIC, CISR, ACSR

Gretta Gerdau, CIC, CISR

George “Max” Helling, CIC, CPCU

Alma M. “Ame” Leggett, CIC

Tammy Lienberger, CIC, CPCU, ASLI

Valerie R. McAlister, CIC

Kathleen S. Nasca, CIC

Barb Schimmel, CIC

Julie Shine, CIC, CISR

Stephanie L. Warner, CIC, ACSR


CISR Designees in Attendance


Sherry L. Gibson, CISR, ACSR

Landon C. Kilbride, CISR

Kara L. Shields, CISR

CIC Scholarships


Gladys Boutwell

Kari Motley




Outstanding CSR of the Year


Gladys Boutwell, MBA

Portland, OR


Gladys holds a Bachelor’s Degree in Business Administration and an MBA in International Business and Leadership & Management. After spending 20 years in corporate America, she was laid off from her position with a major payroll provider. She calls it a “fluke” that she was introduced to the insurance industry. What began as a way to provide for her family, turned into something much more.


She has stayed in insurance because of the 1) flexibility; 2) the people; 3) the education of others; and 4) helping others. In Gladys’ words: “As I came into insurance by chance, the ability to help, educate, collaborate, all while being flexible with my schedule has allowed me the opportunity to stay and make this industry my career, by choice.” Her involvement in health insurance and particularly the Affordable Care Act led her to write a short 96 page eBook that reached Amazon’s #1 Best Seller’s List. Gladys is working on her CIC designation and plans to complete the process in 2017.



Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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PIA National Reacts: No More Federal Insurance Anything

Posted By Administration, Tuesday, January 17, 2017

Last week Weekly Industry News reported that Federal Insurance Office (FIO) Director Michael McRaith is leaving his post at the end of this week. McRaith’s decision pleased PIA National Executive Vice President Mike Becker and other key players in the association.


With McRaith gone and with a Republican Congress looking at major modifications of the Wall Street reforming Dodd-Frank Act, PIA wants the House Financial Services Committee to not only do away with the FIO when the Financial CHOICE Act is acted upon but eliminate its replacement, the Office of the Independent Insurance Advocate. And the association sent a letter to committee chairman and Texas Republican Rep. Jeb Hensarling requesting that change.


“We are concerned that merging the FIO into such a new office could unintentionally establish an even stronger federal insurance entity with an even broader mandate,” Becker said.


PIA National Vice President of Government Relations Jon Gentile said neither an FIO or an Office of the Independent Insurance Advocate is needed. “If the goal of the new Congress is to eliminate unnecessary federal regulation, getting rid of the FIO makes good sense. Doing so would reaffirm that regulation of insurance should continue to be the responsibility of the states,” Gentile said.


In the letter to Hensarling, PIA National said it, “respectfully asks that the 115th Congress use the Financial CHOICE Act to fully repeal the FIO without shifting its current duties into a new federal office. It is possible to achieve the goals of streamlined federal efficiency, a unified voice in international negotiations, and the provision of resources to the independent member of FSOC without the creation of this office. We would welcome the opportunity to discuss such solutions.”


For his part, McRaith defended his work on behalf of the FIO and his Department of the Treasury bosses and said he defended the industry and was not a threat to state regulation. “We are not here to take from the states what McCarran-Ferguson has given to them but we are here to serve the national interest,” McRaith said in his resignation letter.


Source link: PIA National, Insurance Journal



Tags:  Insurance Content  Insurance Industry  Insurance News  PIA National Reacts: No More Federal Insurance Any  Weekly Industry News 

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U.S. & Europe Insurance Regulation: A Victory for the States?

Posted By Administration, Tuesday, January 17, 2017

The PIA and other insurance groups have been worrying since the passage of Dodd-Frank and the establishment of the Federal Insurance Office (FIO) that the regulation of insurance would be taken away from the states.


Now it appears an agreement reached between Europe and the U.S. will nullify that concern. Maybe. Negotiators announced last week that agreement has been reached that covers the three key areas of insurance supervision:



  Group supervision

  The exchange of insurance information between regulators


What that means is wherever and insurer is operating, that area’s insurance regulations will apply. In other words, if a company is operating in the state of California, or Oregon, Montana or Washington, the regulator in that particular state will have jurisdiction.


National Association of Insurance Commissioners (NAIC) President Ted Nickel — who is Wisconsin’s insurance commissioner — isn’t so sure the agreement really does that. He said the NAIC is reviewing but skeptical the agreement negotiated by the U.S. Department of the Treasury is the real deal.


“After more than a year of secret meetings it’s disappointing that in the waning days of the administration we are finally seeing the details of what purports to be a covered agreement between the U.S. and EU. As most state regulators were not allowed to participate in the process, the NAIC is coordinating a thorough review of the agreement to ensure consumer protections are not compromised through the preemption of state law, and we encourage Congress to do the same. Of great concern is the potential to use this agreement as a backdoor to force foreign regulations on U.S. companies,” Nickel said.


Source link: Insurance Journal



Tags:  Insurance Content  Insurance Industry  Insurance News  U.S. & Europe Insurance Regulation: A Victory for   Weekly Industry News 

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Insurance’s Dwindling Old Pros & Their Replacements

Posted By Administration, Tuesday, January 17, 2017

Droves. That’s the word used most to describe the numbers of Baby Boomers retiring these days. The word is not being bandied about lightly. In the fourth quarter of 2016, some 800,000 Baby Boomers bagged working and retired.


A lot of the people in that 800,000-plus number worked in insurance.


A big concern is who is replacing that lost talent. That would be Millennials — people born between 1980 and 2000 — and they have much different expectations than those they are replacing. Insurance agencies and companies — since they’re nothing like their parents or grandparents when it comes to the job — need to find a way to understand them, work with them and make them happy.


It’s no easy task considering the long list of what they want in a job and a career:


  Ongoing feedback

  Clear rewards

  A sense of community in the workplace

  Job meaning


So, agencies and companies don’t have to just replace professionals, they should reimagine and reinvent the workplace and put new work and learning systems in place. And they must do it while in competition with other possible career paths.


Financial industry talent expert Ruth Sencio said there are four things you can do to make sure you will be able to land some of that elusive and much-in-demand talent.


1. Understand what Millennials want: They were raised differently than their older brothers and sisters and their parents. Structure was part of that raising but it included a lot of play in addition to work.


That said, they also have a strong sense — as noted earlier — of community. Millennials want employers to join them in a worthy cause and volunteerism. They also want to work in teams and in close community with co-workers. Millennials that are younger have never known a time when there wasn’t digital this and thats. They view technology as the enabler of their lives.


Millennials also don’t want to wait for approval to do things. Hierarchy bothers them.


They want and need feedback. It helps them know where they fit in the big picture. And these young workers want long and short-term goals that make their work meaningful and that lead them to promotion and more importance to the company.


Also, don’t wait too long to promote them. They crave confirmation. Wait too long and they’ll jump ship.


2. Talent management best practices: Have a plan about how you’re going to build your business structure. Culture is critical. Know how you’re going to expand your business and what kind of talent it’s going to take to get you where you want to go. And then impart that vision to the Millennials you hire.


3. Engage Millennials


Setting expectations that’s everything from daily task expectations to overall goals. Then create a plan to help them get there via ways to improve their skills.


Give them feedback regularly, and in the form of dialogue and not a monologue. This is daily basis feedback as well as quarterly.


Evaluation but don’t just evaluate. Give them ideas and realign their goals periodically.


Recognition Pay raises and bonuses are a great way to recognize the contribution of your Millennial employees. But non-monetary perks aren’t bad either. And this recognition is not going to look the same to all employees. That’s why knowing them and their goals and aspirations is critical.




Specific: What will be achieved, when it will be achieved, how it will be achieved


Measurable: Quantity and quality and budgetary considerations for that quantity and quality.


Attainable: Make sure they have the tools, resources, authority and opportunity to attain their goals.


Relevant: Make sure goals and specifics relate to the job and to potential advancement.


Time-bound: Dates and times. Do this at X-point and it gets you to Y.



Source links: PropertyCasualty360.com, Employee Benefit News



Tags:  Insurance Content  Insurance Industry  Insurance News  Insurance’s Dwindling Old Pros & Their Replacement  Weekly Industry News 

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Trump, Congress & Tax Reform: Did They Read the 2016 Taxpayer Advocate Report?

Posted By Administration, Tuesday, January 17, 2017

Candidate Donald Trump promised tax reforms for corporations and individuals. Some conservatives — and even some liberals — have been screaming for reforms for years. Republicans are positive corporate reform will happen and Republicans in Congress are already moving that direction.


Those same Republicans are not sure about how quickly the much-needed relief for middle-class taxpayers will happen. Or if it will happen at all. And while they’re all pondering and pontificating on those reforms, both parties ought to read the two reports issued late last year by the Taxpayer Advocate Service (TAS).


The law that governs the Internal Revenue Service says it must issue two reports to Congress every year. The Objectives Report is due in June and covers goals and activities to be covered by the Taxpayer Advocate Service (TAS) for the coming year.


The second is the Annual Report from Nina Olsen, the National Taxpayer Advocate. She’s held that post since 2001. It was given to Congress at the end of December and includes:


  A summary of the 20 most serious problems encountered by taxpayers

  Recommendations to solve those problems

  Efforts to improve customer service

  Efforts to reduce the taxpayer burden


In the report, Olsen wants the IRS adopt what she calls a “taxpayer-centric focus” and it urges Congress to consider simplification when it considers tax reform later this year.


Why? And maybe this is where a President Trump and Congress ought to pay attention when considering reforms. Taxpayers — individuals and businesses — spend about six billion hours a year complying with the filing requirements of the tax code.


Olsen said that does not count the innumerable hours spent on IRS audits and notices. “If tax compliance were an industry, it would be one of the largest in the United States. To consume six billion hours, the ‘tax industry’ requires the equivalent of three million full-time workers,” she said.


This report — that Olsen said was most difficult to write in her career — wants the IRS to change its emphasis, “to create an environment that encourages taxpayer trust and confidence, the IRS must change its culture from one that is enforcement-oriented to one that is service-oriented.”


That’s a huge problem because the IRS for eons has viewed itself as an enforcement agency and serving the government and not the people. Here is what Olsen’s report found:


  The IRS budget is $11.2 billion.

  43% is allocated to enforcement

  Just 6% goes to taxpayer outreach


And to add insult to injury, Olsen said the 2017 budget asks for 7.2% more for enforcement and just 3.1% more for taxpayer services.


“It should be emphasized that more than 98 percent of all tax revenue collected by the IRS is paid voluntarily and timely. Less than two percent is collected through enforcement action. Thus, increasing enforced collection would be a hollow victory if voluntary compliance declines because of decreasing taxpayer service and the attendant loss of good will,” she wrote.  


Olsen said the reverse is needed:


  The IRS receives 100 million phone calls annually

  Of those received in 2015 just 38% got answered

  2016 was a little better — but still awful — at 53%

  Most calling and who got an answer were on hold for an average of 30 minutes in 2015 and 18 minutes in 2016


This non-customer service philosophy — Olsen reports — causes serious problems for the consumer. “In an enforcement-oriented tax agency, if taxpayers don’t get the help they need to comply and they make a mistake, they are treated as if they are tax evaders. This treatment in turn breeds resentment and increases the risk that the taxpayer who was willing to comply is no longer willing to do so. In this way, the underlying assumption by the tax agency that taxpayers will evade tax becomes a self-fulfilling proposition. The agency ends up converting a compliant taxpayer into a noncompliant one,” she wrote.


Her report suggests an alternative.


“What if the tax agency adopted a different approach toward taxpayers? What if it assumed that taxpayers, by and large, wanted to obey the law and that the primary mission of the tax agency was to facilitate that compliance by providing taxpayers with the assistance, education and clarity they need to meet their tax obligations? What if we started out accepting that taxpayers will make mistakes and, until proven otherwise, assume those mistakes are not attributable to a tax evasion motive? Because, after all, tax noncompliance like all human behavior is driven by a broad spectrum of factors, from just plain carelessness to ignorance to confusion to polemics to avarice. By focusing on the source or reasons for the taxpayer’s noncompliance and not just on the end result of the taxpayer’s behavior, we have a better chance of changing the taxpayer’s behavior and improving tax compliance going forward,” Olsen said.


She isn’t — as some might say — wanting the IRS to not enforce the tax code. “This is not to say we should ignore those who are actively evading tax. Rather, it is to say we should design our tax system around the taxpayers who are trying to comply, instead of those who are actively trying not to,” Olsen pointed out.


And with that Olsen concludes it’s time for Congress — and in this case a President Trump — to overhaul the system. “It has now been more than 30 years since Congress enacted the Tax Reform Act of 1986 to substantially simplify the tax code and since that time, the code has grown more complex by the year, as evidenced by the fact that Congress has made more than 5,900 changes to the code — an average of more than one a day — just since 2001. The compliance burdens the tax code imposes on taxpayers and the IRS alike are overwhelming, and we urge Congress to act this year to vastly simplify it,” her report said.


Here’s the gist of why. The tax code runs several million words and thousands of pages

But it contains just a little over 200 deductions, credits and exclusions. Those “exclusions” are collectively known as tax expenditures and they are essentially deductions. In 2016 those exclusions amounted to $1.42 trillion.


That complexity, Olsen writes, “rewards taxpayers who can afford expensive tax advice and discriminates against taxpayers who cannot.”


Translation: Those who can afford sophisticated advice can get those benefits and those who can’t afford it — or who are less sophisticated — miss those opportunities. “The tax liability of an individual or a business should depend solely on how much is owed under the law — not on the taxpayer’s or preparer’s expertise in the law. A simpler tax code would go a long way toward solving this problem and ensuring that similarly situated taxpayers pay the same tax.”


That’s where Olsen’s report pops out suggested reforms:


  Repeal the Alternative Minimum Tax for individuals

  Consolidate the family status provisions in the tax code

  Consolidate at least 12 incentives to save or spend for education

  Consolidate at least 15 incentives to save for retirement

  Simplify worker classification determinations to minimize employee-versus-independent-contract disputes

  Eliminate incentives to enact tax laws that expire or sunset

  Eliminate phase-outs of tax benefits as income rises

  Streamline the more than 170 civil penalties in the tax code


“The starting point for discussion would be a tax code without any exclusions or reductions in income or tax. A tax break or IRS-administered social program would be added back only if lawmakers decide, on balance, that the public policy benefits of running the provision or program through the tax code outweigh the tax complexity burden the provision creates for taxpayers and the IRS.  At the end of the exercise, tax rates can be set at whatever level is required to raise the amount of revenue that Congress determines is appropriate,” Olsen concluded.


By the way, IRS Commissioner John Koskinen agrees with Olsen that a simpler tax code would be good for the people and for the IRS. However, he disagrees that the IRS is overlooking service to the taxpayer. “We strongly believe that a balanced approach to taxpayer service and tax enforcement is critical to running a sound tax system,” he said.


Source links: IRS, Forbes



Tags:  Congress & Tax Reform: Did They Read the 2016 Taxp  Insurance Content  Insurance Industry  Insurance News  Trump  Weekly Industry News 

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The Overtime Rule: A Sigh of Relief … Kind of

Posted By Administration, Tuesday, January 17, 2017

Coming soon to a state near you? Five states are trying to implement this at the state level and labor experts think more states could join the bandwagon in the near future.


Here’s the issue. The Obama administration run Department of Labor tried to change the federal government’s overtime threshold from the current $455 a week to $913. If implemented it would have impacted 4.2 million workers. It had a lot of small business — and large — really concerned.


Just before the rule was to be implemented a federal judge in Texas — based on appeals by the U.S. Chamber of Commerce and other employer groups — put a stay in place. The Labor Department is appealing but it’s doubtful the appeal — even with a positive ruling — will change anything.


A President Donald Trump and his Labor Department appointee and CKE Restaurants (Carl’s Jr., Hardees) CEO Andrew Puzder and the Republican Congress don’t like the rule. Puzder argued last May that the rule will “simply add to the extensive regulatory maze the Obama administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere.”


Democrats in Rhode Island, Connecticut, Maryland, Wisconsin and Michigan are introducing similar reforms in their Legislatures. And they point to companies like WalMart — who are keeping the soon-to-be defunct rules in place — as it being beneficial.


Weekly Industry News will keep you posted on any such introductions in the nine PIA Western Alliance states.


Source link: Insurance Journal



Tags:  Insurance Content  Insurance Industry  Insurance News  The Overtime Rule: A Sigh of Relief … Kind of  Weekly Industry News 

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