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March 3rd, 2023 - A publication of the Independent Insurance Agents & Brokers of California
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Jonathan Schreter
President
IIABCal
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President’s Message
Healing a Sick Patient
An AM Best presentation at the annual meeting of the Surplus Line Association of California in February outlined some sobering facts about the state’s insurance marketplace. Among them:
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Twenty percent (20%) of the entire nationwide total of surplus line transactions are in California
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Market share among admitted insurers has dropped at the same time the market share among non-admitted insurers has grown, from approximately a 93-7 split of admitted/non-admitted in 2011, to approximately 86-14 in 2021 (the most recent year data is available)
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Surplus line placements have increased nationwide, but the growth in the California non-admitted market is far greater than the national average.
Startling Statistics!
These startling statistics are yet another indicator of an unhealthy property insurance environment in California, which California Insurance Commissioner Ricardo Lara had failed, at least to-date, to remedy. Rather than address the fundamental issue of rate adequacy essential to any healthy, competitive insurance market, the commissioner continues to propose stopgap measures (like ordering the FAIR Plan to offer coverage beyond its statutory mission) and impose well-intentioned, if anemic, orders on insurance (like offering discounts for home-hardening improvements).
Fortunately, things are changing, thanks to IIABCal. Since our comprehensive advocacy campaign began last October, we have led the industry charge in publicizing the severity of the crisis in property insurance availability - and developing a comprehensive solution for legislative enactment or regulatory implementation.
IIABCal on the Move!
Just in the last 10 days, IIABCal was invited to provide testimony at a Senate Insurance Committee fact-finding hearing on the current market crisis, and our General Counsel met with senior advisors to the Insurance Commissioner to address possible solutions (see related stories below). We are cautiously optimistic that policyholders are beginning to understand that the current status quo must not be permitted to continue.
For the past six months, IIABCal has been on the forefront of healing a very sick patient known as California property insurance marketplace, and we won’t stop until the patient is back on its feet doing the job it was designed to do – meeting the needs of California insurance consumers.
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CEO Corner
"Great Communication Begins With Connection" – Oprah Winfrey
For 34 years, David Benesh, Vice President, Marketing and Communications, has connected members to IIABCal through thoughtful, substantive, and relevant communications. He has guided the messaging through our industry’s good times and bad times, always committed to educating our members with honesty and sincerity. He has skillfully scripted IIABCal events, and he has been a dedicated and creative contributor to the senior management team. David has always taken his job and his responsibility seriously and said he will forever be proud of representing the voice of independent insurance agents and brokers in California.
Those of us who have had the privilege of working with him will miss his sense of humor and his ability to churn out prodigious amounts of copy on deadline.  We know he will bring the same fierce determination he always displayed on the ice, playing in an adult hockey league, to his latest passion:  History.  While working full-time, he enrolled in a virtual degree program offered by Arizona State University and earned his Master’s degree. 
David is leaving us on March 31 - 8,224 working days after coming to IIABCal as a young, scrappy newspaper reporter from South Florida. David has left an indelible mark (pun intended!) on IIABCal and we wish him great fulfillment and joy in the next chapter!
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Jill Epstein
Chief Executive Officer
IIABCal
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"Representing independent insurance agents & brokers in California was a responsibility I never took lightly and something I will always be proud of." David Benesh
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IIABCal Advocacy
IIABCal Testifies Before Senate Insurance Committee on Property Insurance Crisis
Independent insurance agents and brokers are experiencing the worst insurance market for property and homeowners’ insurance that most have ever seen in their careers, and immediate action is required to restore a competitive insurance marketplace, IIABCal told the Senate Insurance Committee this week.
IIABCal was the only producer organization invited to testify at a special oversight hearing, March 1, on the state of the property insurance market—designed in part to call greater attention to the widespread nature of the crisis, and also to hold accountable California Insurance Commissioner Ricardo Lara, whose job it is to ensure a healthy, competitive marketplace.
Irene Sabourin Represents Producers
Speaking for IIABCal was Irene Sabourin, a producer at Hub International in Sacramento with over four decades of experience in personal lines—and a member of the California FAIR Plan Board of Directors, representing producers.
“With the advent of the many recent catastrophic wildfires, and the inability for insurers across the board to obtain approval from the Department of Insurance to charge adequate rates for this exposure, regular admitted insurers have been retreating from the California Market for the last several years,” Sabourin said. “Not only is this undermining the future of our agency, but it is also having devastating effect on our clients and on the insurance buying public.”
Unattractive Options
Sabourin told the influential committee that many California property owners today face three unattractive options:
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Purchasing a FAIR Plan policy that in many cases will leave them underinsured;
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Finding a non-admitted insurer willing to issue a policy, at frequently astronomically higher prices, or dramatically reduced coverage, or both; or
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Going without insurance and praying they don’t suffer a loss.
“Insurers tell us, uniformly, that they cannot get adequate rates approved in California, or that it can take years for the Department to make rate decisions, or both. Moreover, insurers have little or no confidence that they can obtain rates that are adequate to support the state’s catastrophic fire exposure they are being asked to assume,” Sabourin said.
IIABCal Plan To Solve Crisis
IIABCal, with funding from its Legal Defense Fund, has developed a plan that, if enacted by the Legislature or implemented by the Commissioner, could entice admitted insurers to resume writing and renewing policies in areas with the highest exposure to wildfire risk. Keep pressure on the commissioner by making a contribution today to the Legal Defense Fund.
Sabourin highlighted three of the major aspects of the IIABCal plan in her testimony.
“It is incomprehensible to me that [California insurance rate law] does not recognize the huge reinsurance costs that insurers must pay; and that it does not permit insurers to use widely accepted tools for projecting future losses; and that [the insurance commissioner] takes so long to act upon rate increase requests,” she testified.
IIABCal To Provide Additional Testimony
Committee chairwoman Susan Rubio said the committee would hold further hearing on this subject as the legislative session progresses. A similar oversight hearing has been scheduled by the Assembly Insurance Committee next Wednesday, March 8, and IIABCal will be providing testimony at that hearing as well.
Sabourin concluded her testimony be describing the emotional toll this crisis takes on independent insurance agents and brokers who pride themselves on their ability to help consumers obtain the insurance protection they need.
Brokers Face Difficult Task
“It is deeply concerning to witness what brokers, and their staff are facing in today’s insurance industry due to the current state of the market,” she said. “The amount of time it takes to write a single policy has increased from days to sometimes weeks. I recently spent over eight hours trying unsuccessfully to place one home with no history of any claims. Another carrier just slashed commissions, which forces us to work harder than ever for less than ever.
“I love this business, but I have never seen anything like this in my 44 years. Even homes in the suburbs/city streets of Sacramento and Placer County are being non-renewed for “trees.” If your home backs to a bike trail or a golf course, beware. These issues are causing many of my colleagues to leave the industry or take early retirement. It is just too much! This is a great loss for consumers who rely on these individuals – in their community - to act on their behalf. I understand the struggle and the pressure that my colleagues, clients, and your constituents are facing, and I hope my comments today help find a solution for them.”
For the full story on the Senate hearing, click here.
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IIABCal Advocacy
IIABCal Meets with Top CDI Officials on Property Insurance Crisis
IIABCal General Counsel Steve Young and Lobbyist John Norwood met Feb. 21 with California Insurance Commissioner Ricardo Lara’s top deputy to urge the Department to take immediate action to restore the admitted market for property insurance to competitive health.
IIABCal explained the four-part plan it has developed—with the assistance of expert lawyers and actuaries retained with the Association’s Legal Defense Fund—to incentivize insurers to resume writing insurance in areas of the state most prone to catastrophic wildfire exposure. It has three main components:
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Giving insurers credit for the substantial costs they incur to procure reinsurance on California property risks. Such expenses are currently excluded from CDI ratemaking formulas.
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Allowing insurers to use widely accepted models to better empirically predict potential wildfire losses. Currently, CDI requires insurers to base rates solely on their own historic loss experience.
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Requiring the insurance commissioner to comply with longstanding legal requirements to act upon rate requests within six months. For too long, the Commissioner has effectively forced insurers to waive that deadline, which has resulted in interminably long delays.
Martinez requested the meeting to express the Commissioner’s frustration with an essay written by Norwood that called attention to insurers’ inability to get rate applications reviewed on a timely basis.
IIABCal Willing To Work With CDI
Young and Norwood both told the Department that IIABCal had no wish to embarrass the Commissioner, and would love nothing more than to work collectively with the Department to reopen the admitted property insurance market; however, there has been no evidence until recently suggesting the Department was prepared to start ensuring rate adequacy.
Martinez told IIABCal that the Department is pursuing several paths and actions this year, using its existing powers, to mitigate the current availability crisis, and encouraged IIABCal to work with the Commissioner toward that objective, rather than to introduce its plan in the form of legislation.
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IIABCal Reaches One-Third of Its Fund-Raising Goal
As an IIABCal member who depends on the vibrancy of the Independent Insurance Agency system to provide insurance coverage to your clients, we want you to be aware of our historic fundraising campaign to restore California's property insurance marketplace.
Since the announcement of our campaign, we have reached one-third of its goal, but much more must be done.
"We are so grateful to all the individuals, agencies, and carriers who have helped us reach this first milestone in our historic campaign," IIABCal CEO Jill Epstein said. "In the last two weeks, we have doubled our total contributions! We need to keep pressure on the Commissioner, and we are counting on the rest of our member family to contribute to sustain these efforts."
Please contribute to this campaign to restore the California property insurance marketplace and consider asking all of your producers to contribute today by visiting 2023LegalDefenseFund.org.
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2023 Second Quarter Legislative Briefing
Insider's View of How Bills May Impact Independent Agencies
Join IIABCal’s Lobbyist John Norwood & General Counsel Steve Young for this second-quarter, members-only webinar briefing on the 2023 California Legislature, May 10th, 10-10:30 a.m.
This 30-minute webinar will provide an insider’s assessment of key bills impacting the insurance industry, including IIABCal's legislative movement to resolve the current property market crisis.
To register for this webinar, click here.
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John Norwood & Steve Young
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Governance:
Winter Board Highlights
The IIABCal Board of Directors met on February 10, 2022. These highlights are designed to provide members with a summary of discussions and actions.
The Pleasanton office was officially closed on January 31, 2023, which will save the organization approximately $80k in rent expense.
The Board received an update on progress towards the strategic goals for 2023: Know our Members’ Needs/ Challenges/Opportunities; Create Financial Sustainability; Expand Outreach; and Enhance the Board Experience. The Board is eager to further engage with local associations.
Staff has successfully identified 300 “right people” at member agencies for market access promotions. The goal is to ensure members know about the products offered through IIABCal.
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IIABCal social media followers and “likes” have increased significantly across all platforms. (Find us on Facebook and LinkedIn as “Independent Insurance Agents & Brokers of California”; “IIABCal” on Twitter: and “iiabcal” on Instagram.
The Legal Defense Fund campaign is underway, with individuals, agencies and carriers contributing more than $50,000 as of today. IIABCal has worked with outside lawyers and actuaries to develop legislation that would hold the Commissioner accountable and provide powerful incentives for insurers to resume writing and renewing policies.
IIABCal will participate in upcoming Senate Insurance Committee and Assembly Insurance Committee Oversight Hearings to ensure legislators understand how the inaction by the Department of Insurance is impacting their constituents. For more on the hearing, click here.
Registrations and sponsorships for Blue Ribbon Conference (April 30 – May 4) are very strong. Register today!
The next Board of Directors meeting will be held on May 18, 2023.
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IIABCal Umbrella: A Reliable Choice For Members For More Than 35 Years
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Today it is not easy to find a personal umbrella policy. But thanks to IIABCal partnership with Monarch E&S Insurance Services, IIABCal members have access to the A&M personal umbrella through Hudson Insurance Company (AM Best Rating A) with limits up to $10MM.
This not only is a solution for the primary umbrella layer, but the IIABCal Umbrella program also offer excess layers for those that need more limit over another personal umbrella.
A&M has proven to be responsive and adept at finding solutions for our agents and brokers.
“A driving force behind Monarch’s December 2021 acquisition of A&M is their 35-year collaboration with IIABCal which mirrors Monarch’s decades old sponsorship support of your organizations,” said Derek Borisoff, chief executive officer, Monarch.
Reliable & Proven!
"With social inflation making a measurable impact to personal liability losses, having access to a reliable and proven personal umbrella program is essential," Borisoff said. "What makes this program special is that it is supported by your association which can provide added confidence in placing this product for your clients because while Hudson Insurance Company is represented by other wholesale brokers, this is the only program in partnership and supported by IIABCal."
In addition, Borisoff said, all policies placed with the IIABCal Umbrella Program will be part of this cohesive book of business that enables leverage to continue the program when others may not, and provide income to our association enabling continued work on important legislative and regulatory advocacy issues.
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Derek Borisoff
CEO
Monarch
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Want More Info on the Umbrella Program?
Contact:
Liz Espinoza
Vice President,
Personal Lines Dept.
Tel: 323-255-2333 x 223
Fax: 323-255-0957
Email
Website
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IIABCal Personal Umbrella Insurance
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What Members Are Saying
“At Gallagher, we have worked with Monarch E&S for over a decade. They continually work for us providing timely responses, create solutions and have awesome people to work with.
Monarch E&S continues to be our go to wholesale broker and the one for any personal umbrella or excess liability needs.,”
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Dina Campana Smith
Managing Director
Arthur J. Gallagher, Inc.
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Program Highlights:
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Primary and Excess umbrella layers available
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Coverage for celebrities, athletes or target personalities available
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Offers up to $2M UM coverage (except CA)
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Limits up to $10,000,000 available
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Auto limits of $250,000/$500,000/$100,000 acceptable for clean drivers
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$25,000 of Identity Theft coverage available
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Zero self-insured retention
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Direct Bill available
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LLC / Trust / Estates can be listed as additional Insured
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AM Best Rating of A - Excellent, Financial Size Category XV
Find out more about the IIABCal Personal Insurance Program.
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Spring Is Just Around the Corner - Are You Ready For Your New Hires?
IIABCal's Education Partner, My Agency Campus, offers on-demand, cost-effective, measurable training for agency employees. 20% off all bundles by entering code NewHire at checkout.
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Last Speaker Announced for 2023 Blue Ribbon Conference
Speaking on the state of the insurance market from the trenches, Amwins President Hank Haldeman and Executive Vice President Holland Wells round out the speaker roster for the 2023 Blue Ribbon Conference.
Victoria Roach, President of the California FAIR Plan, and General Counsel Steve Young will have an insightful discussion of the state's property market and what can be done to relieve market pressures.
Meredith Powell will show how to turn uncertainty into a competitive advantage.
Chris Cheetham-West will discuss strategies for managing and working on remote teams.
Rick Sessinghaus will cover key principles top athletes and executives train to shift from fear to flow.
Bob Jones will share how his POW experience can relate to success today in business and life itself.
For more information, visit IIABCalBlueRibbon.org.
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California Privacy Rights Compliance Webinar March 15th
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In 2018, California enacted the first comprehensive data privacy law in the nation, the California Consumer Privacy Act (CCPA), providing consumers with various rights regarding the data companies collect about them and how that data is used or disclosed. On January 1, 2020, the CCPA went into effect.
Ten months later, California voters expanded that law by passing Proposition 24, the California Privacy Rights Act (CPRA) of 2020. The CPRA took full effect as of January 1, 2023 – requiring covered companies to adequately train employees who may receive consumer inquiries.
Join top privacy and data security legal experts from the California Chamber of Commerce and Mariner Strategies, LLC, for CPRA training that will include
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an overview of what this law requires and how to implement a compliance program. Businesses already in compliance with the CCPA will learn about the new or changed obligations and rights that took effect under Prop 24 on Jan. 1, 2023.
For more information, click here.
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Member Question of the Month
Can An Agency Retain Interest On Its Trust Account Deposits?
Q. Does a producer need authorization from an insurance client to retain investment income on trust funds, and if so, is a simple disclosure on a website sufficient?
A. Yes, and no. California Insurance Code § 1734.5(b) expressly requires all licensees to obtain written permission to retain investment income from “every insurer or person” who is entitled to the funds being invested. And § 1734.55(e) makes licensees expressly responsible for any loss in principal that might obtain from trust account investments
Thus, any broker-agent who wishes to retain investment income must obtain written permission, from policyholders and insurers, or any other person to whom premium funds may be owed, in order to lawfully retain investment earnings. Mere disclosure on a website would not satisfy minimum legal requirements. Here is the text of the statute in question, with key provisions highlighted in yellow.
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IIABCal’s “Member Question of the Month” features questions from agents & brokers.
IIABCal General Counsel Steve Young provides answers to your legal questions as part of your membership benefits.
Have a question? Email Steve Young at syoung@iiabcal.org.
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Jonathan Schreter Sits Down & Talks Insurance
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IIABCal President Jonathan Schreter works with inner-city children by providing access to the arts.
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For nearly 20 years, IIABCal President Jonathan Schreter has served commercial P/C risks for charter and independent schools (K-12), as well as middle-market businesses in the hospitality, wholesale, manufacturing, and technologies industries.
With a diverse career that began in marketing and advertising for the Coca-Cola Company, Jonathan combines creative thinking and analytics to offer a consultative approach to risk management.
Jonathan earned his MBA from the Anderson School of Business at UCLA in 2000 and his Certified Insurance Counselor designation in 2010. He has been recognized as a Top Producer in the industry for seven consecutive years. He is President Emeritus of the UCLA Anderson Alumni Network, and serves as Board Chair of Inner-City Arts, a non-profit program for inner-city children.
Jonathan sat down with Independent Voices Podcast Host James Lott Jr. to discuss his outlook on the industry and IIABCal's effort to lead the insurance industry through the current market crisis. Access the podcast.
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IIABCal Welcomes Its New Members for January and February, 2023.
We look forward to welcoming them to our IIABCal family and to get them started using all the valuable benefits offered through membership.
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IIABCal Welcomes Mercury Insurance To Membership
IIABCal welcomes its newest associate member, Mercury Insurance, a multiple-line insurance carrier offering personal auto, homeowners and renters' insurance through independent agents. Find out why Mercury Insurance joined IIABCal in our Member Spotlight story.
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IBA-SFV Holds 74th Annual Installation
Local agents & brokers and company officials gathered in February for the IBA of San Fernando Valley 74th annual Board Installation at the Woodland Hills Country Club.
The well-attended event was highlighted by special guest speaker, IIABCal President and two-time IBA-SFV past president Jonathan Schreter.
The 2023 IBA-SFV Board of Directors welcomed new member Yolanda Haro, and returning board member Sherri Ben-Nun. IBA-SFV also said goodbye for now to long time board member and past president Simon Asheroff.
IBA-SFV is excited to blaze ahead in 2023 under the leadership of new president Ryan Surina.
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IIABCal President Jonathan Schreter installs 2023 IBA-SFV Board of Directors
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Simon Asheroff (left) says goodbye "for now" to Alon Ben-Nun and the IBA-SFV Board.
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San Diego "I" Day Set For May 11th
The Independent Insurance Agents & Brokers of San Diego will hold its annual
I-Day, Thursday, May 11th, 2023.
Join other local agents and brokers and company officials at the Town & Country Convention Center to explore more than 100 booths, attend morning CE class, and participate in the luncheon where local industry awards will be presented to deserving individuals for the following categories: The Andrew H. Ekern Award, Agent of the Year, Associate of the Year, Emerging Leader of the Year, and Insurance Company Professional of the Year as well as Insurance Woman of the Year that we share with San Diego
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San Diego agents. From left, Brad Wilson, Joe Hamilton, Jeff Byroads, German Gonzales and Juan Buendia.
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Association of Insurance Professionals. Exhibit Booths, Sponsorships, and Lunch Tickets are still available. CE and Exhibit Hall is free, but pre-registration is encouraged. Register here.
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IBA-BGP Holds Annual Principal's Dinner
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Thank you to the Board of the Independent Brokers and Agents of Burbank, Glendale, and Pasadena (IBA-BGP) for inviting IIABCal President Jonathan Schreter and IIABCal CEO Jill Epstein to present at their annual Principal’s Dinner!
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Blast From The Past! 1993 Edition!
IIABCal Receives Publishing Award
In 1993 & 1994, Big "I" recognized IIABCal with the IIABA Publication Award for The Weekly Insider, a four-page membership newsletter.
In 1993, IIABCal also received the national Membership Service Award for successfully negotiating an agreement for independent agents and brokers to access the State Compensation Insurance Fund, producing billions of dollars in revenue for the independent agent market over the years.
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IIABA President Eric Gustafson presents National Publication Award to IIABCal President Glenna Androus as then IIABCal Communications Director David Benesh looks on.
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