May / June 2007
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 Taking Note of the Value We Bring |
| I thoroughly enjoyed our Annual Meeting, and I hope everyone who attended did also. Over 700 attendees came to the JW Marriott Desert Ridge Resort & Spa in Phoenix to network and to learn about the state of our industry and important risk issues. Steve and Diane Cory are to be congratulated on a wonderful conclusion to a very successful NASBP Presidency.At the Annual Meeting, the President and CEO of Safeco Corporation, Paula Rosput Reynolds, provided a poignant keynote address. Although she is a newcomer to the insurance industry, her presentation on the insurance industry as a whole provided a perspective that should assist us all. She clearly appreciates the important differences between the surety and the insurance businesses, and she understands the special relationships that exist among the client, agent, and surety company.The surety process consists of a unique set of relationships that enhance the ability of our clients to be successful in their businesses. We, as agents, together with surety companies are able to define the surety process by the value we bring to our clients and the problems we help them solve everyday. As surety professionals, our ability to provide critical reasoning and analytical review allow us to assess risk and provide valuable insight to our clients and to the surety companies with which we do business.
Just as surety professionals must add value to their relationships with clients, the NASBP also must add value to membership. For this reason, my theme for the next year will be “Adding Value”. Surety bonds provide value by pre-qualifying contractors and, if the process does not go as intended, responding to claims. As surety professionals, we must add value to the services we provide our clients by providing sound direction and business advice as well as assisting the surety companies in the underwriting process. The ways in which we add value continue to change, which has made the role of the NASBP even more critical in the complex world in which we live and do business. More is expected of all of us, and NASBP is well positioned to assist us in meeting our challenges. We must continue to develop our knowledge and skills so that we are all able to add value to our relationships. Likewise, through the efforts of its staff and the work of its volunteer committees, NASBP continually strives to provide the tools and resources that make us better at what we do, and I intend to work this year to strengthen this role of the NASBP even further. Over the last 12 months NASBP has:
As President, I will look for ways in which NASBP can provide meaningful and additional value to all members. With this agenda in mind, I offer you a challenge. Get involved and take advantage of all that the NASBP has to offer. If you have new ideas or ways of making established programs better, I encourage you to contact me, any of the members of our highly professional staff, the Executive Committee, or your Regional Vice President or Director. I look forward to attending the various Regional Meetings in the coming year and meeting as many members as possible. Our industry is doing well, let’s continue to work together to make it even better. |
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| 2007-2008 Officers, Executive Committee Members, Directors, and Regional Vice Presidents Elected |
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At the Annual Meeting in Phoenix the following were elected as NASBP’s 2007-2008 officers. William F. Maroney was elected NASBP First Vice President. Bill is Senior Vice President of City Underwriting Agency, Inc. of Lake Success, NY. Todd P. Loehnert was elected NASBP Second Vice President. Todd is Sr. Vice President/Bond Manager of Wells Fargo Insurance Services of Kentucky, Inc. of Louisville, KY. J. Spencer Miller was elected as NASBP Third Vice President. Spence is President of Schwartz Brothers Insurance Agency, Inc. of Chicago, IL. The Executive Committee will be comprised of the four officers listed above and two Ex Officio members who will represent the Directors and Regional Vice Presidents respectively: Patrick T. Pribyl Senior Vice President Lockton Companies, Inc. of Kansas City, MO and Thomas P. Durkin President of Durkin & DeVries Insurance Agency LLC of Burlington, MA. Also, serving on the Executive Committee as NASBP Immediate Past President will be Stephen L. Cory. Steve is President of Cory, Tucker & Larrowe, Inc. of Metairie, LA. Directors and Regional Vice Presidents serving on the NASBP Board of Directors are listed below. Newly elected NASBP Directors are:
They are joining the following NASBP Directors:
The NASBP Regional Vice Presidents are: REGION 1: Philip O. Forker, Anchor Insurance & Surety, Inc., Portland, OR REGION 2: James P. Schabarum II, Cavignac & Associates, San Diego, CA REGION 3: Richard G. Minick, Minick & Company, Albuquerque, NM REGION 4: Thomas M. English, Thomas McGee, L.C., Kansas City, MO REGION 5: Terry Starks, American Agency, Inc. Minneapolis, MN REGION 6: Donnie Doan, McQueary Henry Bowles Troy, L.L.P., Dallas, TX REGION 7: Christopher M. McAtee, The Brower Insurance Agency, Dayton, OH REGION 8: Thomas J. Gentile, Turner Insurance & Bonding Co., Montgomery, AL REGION 9: David R. Summerall, Early, Cassidy & Schilling, Inc., Rockville, MD REGION 10: Bradley J. Hall, Vanner Insurance Agency, Amherst, NY REGION 11: Thomas P. Durkin, Durkin & DeVries Insurance Agency LLC, Burlington, MA REGION 12: Francisco J. Tirado, Marsh-Saldana, San Juan, PR |
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| How Far Is Too Far? – Indiana Supreme Court Decides Coverage of Statutory Bond Requirement |
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| To recover against a payment bond, a party first must be a “proper” claimant—that is, the party must be within the class covered by the bond. Those parties outside the class are considered “too remote.” If the payment bond is one required by statute, the statute will delineate the classes of claimants deemed within the coverage of the bond. However, in some instances, the language of the statute is not entirely clear on who is a proper claimant, leaving courts to interpret the intent of the statutory language. The statute may or may not define the term “subcontractor” or may not explicitly state which tier of claimants (the level removed from the prime contractor) is beyond the protection of the bond.For example, the federal Miller Act does not define “subcontractor” but uses the term in relation to parties who may make claim against the payment bond. Over the years, federal courts have construed the Miller Act to provide protection solely to those claimants at the first and second-tiers. To be within the protection of the Miller Act, a claimant must have a relationship with the prime contractor that is no more distant than a subcontractor to a subcontractor to the prime or a materialman to a subcontractor to the prime. A materialman to a sub-subcontractor or to another materialman has been construed as outside Miller Act coverage.State statutes requiring performance and payment bonds may or may not follow a similar structure to the federal Miller Act. Recently, in Alberici Constructors, Inc. v. Ohio Farmers Insurance Co., the Indiana Supreme Court was confronted with the question of whether a particular state bonding statute, Indiana Code § 8-23-9-9, addressing requirements for contractors on state highway projects to furnish a statutory performance bond which includes coverage for payments to entities providing labor or materials rendered in the construction of the highway, afforded coverage to a third-tier claimant. In that case, a steel fabricator having a purchase order with a second-tier subcontractor sought recovery for nonpayment against the statutory bond, arguing that it was afforded protection under the statute. The surety denied the claim, contending that the steel fabricator was “too removed to have standing to bring claim.” Thereafter, the steel fabricator sued the surety in federal district court, which, in turn, sent the question of law to the Indiana Supreme Court.
Noting that the term “subcontractor” was not defined in the statute, the Indiana Supreme Court reviewed other sections of the Indiana Code, the Department of Transportation regulations, and federal and Indiana case law to ascertain the proper interpretation of the term “subcontractor”—that is, whether it should be construed broadly or narrowly. After analyzing such materials, the Court reasoned that in most instances there is a clear intent to read the term “subcontractor” narrowly and to limit coverage to parties having a direct contract with the prime contractor or a first-tier subcontractor. The Court also reasoned that, in terms of sound public policy, a narrower reading promotes relative certainty for all those involved in public construction projects. The Court roundly rejected the steel fabricator’s argument that the statute should be construed to extend coverage to any entity having an “intimate, immediate and exclusive” relationship to the highway construction project. “Without a bright line defining where surety coverage extends, contractors would face an incalculable risk of liability for claims made by distantly remote suppliers or laborers on contracts made without contractor approval”, stated the Court. To that end, the Court concluded that the statute does not extend coverage under the statutory bond to any entity more remote than a second-tier laborer or material supplier. These materials are provided to NASBP members solely for educational and informational purposes. They are not to be considered the rendering of legal advice in specific cases or to create a lawyer-client relationship. Readers are responsible for obtaining legal advice from their own counsels, and should not act upon any information contained in these materials without such advice. |
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| Annual Meeting Headliner Presentations/Seminars Reveal Positive Industry Outlook and Offer Proactive Risk Management Tips |
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To view a gallery of photos from the Annual Meeting click here.
Positive and proactive describe the multiple headliner presentations and seminars held at the Annual meeting where more than 700 members and affiliates, their spouses, guests and family members attended. Paula Rosput Reynolds, President and CEO of Safeco Corporation, delivered the Keynote Address where she discussed the industry’s future and changing relationships among clients, producers and underwriters.
Richard Foss, NASBP Executive Vice President, delivered a presentation on “The State of the Industry” and summarized how surety executives view their overall performance in 2006 as positive and are in turn optimistic about 2007. Dick revealed that one of the biggest issues everyone is currently addressing is finding and employing quality people. Dick also highlighted results of the Joint NASBP/Grant Thornton survey that is a summary of 260 NASBP members’ perspectives of future of the industry and of the results of the 5-15 Leadership Circle survey where the young leaders of NASBP provided their view of NASBP and its changing role.
The Associated General Contractor’s Chief Economist, Ken Simonson provided a presentation titled, “Construction Outlook for 2007: Will it be Heaven or … ?” Ken invited NASBP members and affiliates to sign-up for his free “Data DIGest,” an e-bulletin providing concise economic data on the construction industry, by sending an email to Simonsonk@agc.org requesting the e-bulletin.
The Meeting also included a fun session titled, “The Art of Face Reading,” that was presented by Mac Fulfer, Esq., author and international lecturer on face reading. Mac Fulfer explained how his 23-year law practice spurred his interest in physiognomy, or face reading, as a tool for successful jury selection. Volunteers helped Mac point out to the audience specific facial features and what they could mean. The following are highlights of the three seminars that were repeated twice during the meeting to allow everyone who wished to see their seminar of choice.
Tracey L. Haley of Zurich America Insurance Company of Dallas, Texas; Steven D. Nelson of SuretTec Insurance Company of Austin, Texas; and Mark H. McCallum of NASBP of Washington, D.C. made a joint presentation on “Adding Value: Identifying Critical Risk Issues in Bond and Project Agreements.” Tracey and Steve pointed out the frequently encountered provisions of bond forms that disadvantage the surety relationship, and Mark discussed the construction forms published by the three major industry document programs including 1) a group consisting of several associations and spearheaded by the Associated General Contractors of America, 2) the Engineers Joint Contract Documents Council (EJCDC) and 3) The American Institute of Architects (AIA). Tracey and Steve began the seminar by describing provisions and contracts that often create headaches for clients, producers, and underwriters. They cautioned that the audience would be well advised to:
Mark reviewed how the years 2004 through 2007 marked a period of significant revision and release activity in the construction forms published by the three major industry document programs: AGC, EJCDC, and AIA. He summarized how these revised document families are in the process of being finalized for publication sometime in 2007. Current industry document revision efforts center on documents impacting most project participants including Owners, Architects, Engineers, Contractors and Subcontractors. AGC is spearheading a broad industry coalition that will publish documents under the name, Consensus Documents. The Coalition is developing a new generation of standard forms that offer all significant industry constituencies “a seat at the drafting table.” More than 18 organizations are participating, including the Construction Users Roundtable (CURT), Construction Owners Association of America (COAA), American Subcontractors Association (ASA), Associated Specialty Contractors (ASC), Surety & Fidelity Association of America (SFAA) and NASBP. They are developing a comprehensive document library covering all project delivery methods and relationship tiers. The first documents are slated to be published later in 2007. These documents provide a ready, broad-based forum to address the issues and challenges confronting the industry and to develop solutions for a collaborative multi-party project agreement and lean construction. The group is using existing AGC documents as a starting “chassis” which are modified by a drafting committee having representatives drawn from all participating organizations. Some specific attributes about the Consensus Documents are that the agreements and general conditions are integrated and the bond forms address traditional, design-build and subcontract construction. Also, included will be various administrative forms and a new electronic communications addendum. EJCDC is also revising some of its documents. The revised set of construction-related documents including bond forms (C-series) are to be issued in 2007. He noted that AGC now is a partner organization in Engineers Joint Contract Documents Committee (EJCDC), and many revisions in the coming editions include improvements from a contractor’s perspective and are “incremental revisions.” Some areas of focus in the (C-700, General Conditions) include:
Mark also discussed areas of focus in the revision process revealed by AIA, such as subcontractor payment verification and dispute resolution procedures. Then, Mark reviewed the recent documents being revised by AIA and explained how AIA is revising its construction family, including A101, A107, A111, A114, A201, and A401, and coordinated owner-architect agreements, such as B141. The A201 and related forms are set to be published in fall 2007. AIA is also considering a new numbering system for some of its documents. A312 bond forms have not been revised in conjunction with release of the A201 construction family. AIA has been drafting with other groups by invitation only including past endorsers such as AGC, ASA, ASC. AIA is broadening its dialogue with the owner community by talking with COAA, NASFA, and attorney groups representing owners and lenders.
2) James M. Shay and Michael J. O’Neill of American Contractors Insurance Group of Dallas, Texas presented a seminar on, “Snakes in the Grass: Understanding Contractors’ Risk Management and Insurance.” Jim and Mike explained how most sureties have identified “deal killer” issues that present undue risk to the client’s bottom line or to that of the surety. They described how there are similar key insurance issues which, if unaddressed, can imperil the client’s balance sheet including the following:
They concluded that the lasting lesson of this presentation was to not overlook insurance coverage as an important avenue of financial protection and financial risk. They emphasized that it is essential to dig into the details of each policy and to make sure that the insurance underwriter has clarified any coverage questions and that the client has adequately sought solutions to protect themselves from uninsured or unfunded exposures that can materially impact the client’s financial statement.
3) J. William Ernstrom of Alberici Group, Inc. of St. Louis, Missouri, delivered a presentation on “A Disciplined Risk Management Program: A Key to Profitability.” Bill explained that a contractor can increase its enterprise profitability based on a pre-contract review program and a post-contract program. His presentation focused on how properly to evaluate a project’s risks and to assist the project team in complying with its obligations and in monitoring project performance. Bill referred to Alberici Group’s program as an example to help demonstrate to the audience how to implement these programs and how they can contribute to overall company profits. He also provided guidelines, charts and checklists that included a list of 10 recommended items contractors should maintain, flow charts of the procedures for eliminating losses and of the contract/review approval process, a contract and subcontract administration checklists, and a monthly project certifications policy and procedure.
The Director of Surety Office Guarantees, Frank Lalumiere, also made a presentation before the Government Relations Committee on the state of the SBA Bond Guarantee program and its outreach efforts to garner feedback from the surety community on ways in which the Program can be improved. Some of these efforts Frank discussed included re-engineering the Program to reduce cycle times and to expedite payments. Also, Frank described how the Program is developing an e-Application that will permit small businesses, surety companies and producers to submit applications electronically. NASBP has participated in a call introducing the SBA e-Application process. The NASBP and the SBA are planning more meetings to discuss these and other improvements for the Program. |
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| Safeco Executive Awarded NASBP’S 2007 Bruce T. Wallace Award |
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Steve Cory announced at the Annual Meeting in Phoenix the selection of Michael C. Peters, retired president of Safeco Surety, as the recipient of the Bruce T. Wallace Award.Mike’s career in the industry spans almost 40 years. Mike joined Safeco Insurance Company in 1968 as a surety trainee after graduating from the University of Washington. Other than a brief period in Chicago, his career with Safeco has been in the Pacific Northwest, where he has held various positions of increasing responsibility. In 1992 he was named vice president and director of contract surety and in 2001 was promoted to president. In 2006, Mike also received the Golden Beaver Service and Supply Award presented by the Beavers, a social, honorary organization formed, organized and managed by construction companies and individuals who are or have engaged in heavy engineering construction.
Unable to attend the Annual Meeting to accept the NASBP award in person, Mike expressed his appreciation in the following message. “I know I haven’t recovered from the news that my name has been added to the illustrious list of selectees for the Bruce T. Wallace Award. I am thrilled and humbled! Had it not been for a long planned trip, you can be certain that I would have been there breaking the door down to get into the convention to receive the award and personally thank all those in attendance. I’m sure that it is abundantly clear to all voting members that this award is the result of the efforts of the 275 dedicated members of the Safeco Surety team—all of whom have worked exceedingly hard over the years to make me look better than I am—not an easy assignment! Thanks to the NASBP membership for this honor—it will occupy a proud place on my wall.” Safeco’s Sr. Vice President, Tim Mikolajewski, accepted the award on Mike’s behalf. The Bruce T. Wallace Award, established in 1990 in memory of the Association’s first executive vice president, is awarded by the Executive Committee to an individual who has distinguished themselves through long and exceptional service to NASBP or the surety industry, or both. The recipient is an individual who has conducted themselves throughout their career in accordance with the highest ethical standards and demonstrated a service characterized by commitment, consistency, intensity, and impact. It is noteworthy that the Bruce T. Wallace Award is not necessarily presented every year, but rather, only when a candidate meeting these high standards is nominated. In fact, since its establishment, the Bruce T. Wallace Award has been presented only twelve times. Previous recipients of the Bruce T. Wallace Award include: Vincent J. Como, John J. Curtin Jr., Ted J. Adams, George T. Holbrook, Jr., Charles H. Fleck, Richard S. Beck, William E. French, John P. Martinsen, Dennis D. Flatness, George F. Thompson, Robert A. Saul, and Curtis B. Roberts. |
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| Past NASBP President Honored for Distinguished Service to Professional Development |
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At the NASBP Annual Meeting Steve Cory honored Past President John J. Curtin, Jr. of Curtin International Insurance and Bonding Agency, Inc. of Lexington, Massachusetts for his unparalleled dedication and commitment to the professional development of surety professionals.The award, named “the President’s Award for Distinguished Service,” the first of its kind given by NASBP, honors an individual who is chosen solely by the NASBP President. Steve announced that the certificate described Jack’s contributions well: “As a member of the Professional Development Committee and a faculty member of the William J. Angell Surety School, Jack has demonstrated an unwavering commitment to the professional development of surety professionals, devoting boundless time, energy, and resources to ensuring educational programs of the highest quality. His contributions as a leader in education are singular and unparalleled.”Jack has been a faculty member of NASBP’s acclaimed William J. Angell Surety School for 30 years. He has served as a member volunteer in NASBP at all levels director, regional vice president, as well as chair of several NASBP committees. (From 1986-87 Jack served as President of NASBP.) Jack graduated from the University of Notre Dame in 1962 and spent four years as an Air Intelligence officer in the United States Navy. In 1966 he joined the Francis H. Curtin Insurance Agency, Inc in Cambridge, MA as a surety bond specialist. In 1975, he and three others purchased the agency from the Curtin family whereupon he became President. In 1989, the owners of the agency decided to split up along functional lines with the surety people becoming a separate surety-only firm. Curtis Roberts of Mills-Roberts & Associates of Dallas, Texas accepted the award on Jack’s behalf.
Recipients of the President’s award receive a framed certificate personally inscribed in two-toned color calligraphy highlighted in gold and signed by the President as well as a specifically minted President’s medallion customized with the NASBP logo and made of 2-troy oz. .999 fine silver. |
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| NASBP Survey to Help Address Member Information Technology Issues |
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The NASBP Automation and Technology Committee has already taken action to heed a message heard frequently at the NASBP Annual Meeting. Both the State of the Industry and Keynote addresses described how information technology is becoming of increasing importance for agents and the industry.In May, the Committee distributed a survey assessing members’ information technology needs and infrastructure. The Committee plans to use the results of the survey to create information technology guidelines and information for NASBP members. Specifically, the Committee believes the results will be helpful in its efforts to:
NASBP recently sent the survey to key members. All participants in the survey will be sent a complimentary copy of the survey results at the end of the summer of 2007. |
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| Exhibitors at NASBP’s Recent Annual Meeting |
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| NASBP would like to thank the 17 Exhibitors who helped make NASBP’s recent Annual Meeting in Phoenix a great success. Their company name, brief description of their product or service, and web site are provided below. | ||||||||||||||||||||||||||||||||||||
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| If you would like more information on our exhibitors, please visit the new NASBP Online Expo by clicking here. |
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| Joint NASBP/Grant Thornton Survey Results Now Available |
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 Members and affiliates now can access the recently published results of the NASBP/Grant Thornton 2007 survey entitled, “Surety Credit to Construction Contractors: The Surety Bond Producer’s Perspective”. Earlier this year NASBP members provided their perspective on today’s construction credit market and on where it might be headed by answering about 25 questions, including new questions about bond availability for small and emerging contractors that had not been included in a the last survey conducted in 2005.Highlights from the 2007 survey include:
To access the complimentary 2007 survey results click here and download the pdf file. Members and affiliates who wish to receive a printed, color copy of the survey results can complete the order form provided here |
and fax it to Grant Thornton. The Grant Thornton Building Business newsletter can also be ordered on this form. Results of the 2005 survey also can be accessed at the same link where the 2007 survey is posted.
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| SuretyPAC Requires Signed Prior Approval Form Before Soliciting Members for Contributions |
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 The SuretyPAC only can solicit directly for voluntary contributions from agencies that have given their signed authorization to the SuretyPAC. NASBP members can provide this authorization by having the NASBP key contact for their agency complete the SuretyPAC prior approval form. Click here to download the SuretyPAC prior approval form. An agency can only authorize one PAC during a calendar year.If you have questions about authorization or are not sure if your agency has completed the form, please contact Kathy Hoffman at khoffman@nasbp.org.
NASBP updated the form this year so that it now provides for individuals as well as for agencies to indicate if the SuretyPac can solicit them for a contribution to the SuretyPAC. Completing the prior approval form does not obligate you or anyone in your agency to make a contribution. Neither the SuretyPAC nor NASBP will favor or disadvantage anyone based upon the making or failing to make a SuretyPAC contribution. Also, federal requirements preclude NASBP from accepting any contributions other than those drawn on a personal checking account. |
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| Commercial Surety: Court Bonds—There is Money to be Made |
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What is a Court Bond? A court bond or undertaking is required of litigants to enable them to pursue remedies permissible by the courts. Typically, a court bond is statutory and guarantees a financial obligation will be fulfilled once the legal proceeding is resolved. The bond might be required by the plaintiff as means of guaranteeing that sound grounds for the lawsuit to be filed exist or required by the defendant as a means of guaranteeing the debt will be satisfied in a timely manner once all legal avenues (appeals) have been exhausted.What is the Industry Experience? The industry experience for Court Bonds has been very profitable. Utilizing the SFAA results as a basis for these estimates, the past 12 years average loss ratio is under 15% and the last five years loss ratio is in the 35% range. Court Bond premium consistently represents 12-15% of the total premium for Commercial Surety.What Opportunities Exist for You? As an insurance agent or broker you undoubtedly have contact with attorneys, contractors, and existing property and casualty accounts that need bonds to support litigation efforts. As with all opportunities, the most important thing to do is to be sure these people know that you or your agency can place these bonds. You already have the contacts within the surety company, and the carriers support your sales efforts and underwriting needs with dedicated staff that specifically handle these underwriting cases. The financial return for the agent is worth the effort to produce these bonds, and the turnaround time by the surety to evaluate the risk is quick so your client will know in a timely manner whether the carriers’ underwriting criteria is met or additional security is required. The bonds usually are in place for one to three years and the first year’s premium is generally fully earned. How are Court Bonds Underwritten? In terms of underwriting, the golden rule is that defendants bonds are the most hazardous since it is alleged the plaintiff has a valid reason for bringing the suit in the first place. Further, once a plaintiff is awarded a monetary judgment, they generally will make demand for the damages. For these reasons, most defendants bonds are fully secured. It is noted however that many Fortune 500 companies do qualify for unsecured bonds based on their unquestioned ability to pay if a verdict goes against them. In these cases, the surety relies on the General Agreement of Indemnity to make them whole if any portion of the bond is paid. For all others, the standard forms of collateral are either a Letter of Credit from a pre-qualified bank or a cash deposit. The former is more common as it is considered a contract between the surety and the bank and, in theory, is outside of the jurisdiction of a bankruptcy court. Cash is accepted by some sureties in cases where it is not believed that the ultimate court decision would likely result in a Bankruptcy filing by the principal. In all cases, you should expect your underwriter to fully underwrite the matter regardless of the type of collateral that is taken. A few common types of Court bonds are:
There is, of course, more detail on Court Bonds available through various surety manuals or you can consult the Commercial Surety On-Line Manual for free at the Members and Affiliates Only section of the NASBP site by clicking here. This is the third in a series of articles on Commercial Surety. Stay on the lookout for additional articles that are dedicated to the Commercial Surety line. Prepared by NASBP’s Commercial Surety Committee Chair, Lynne W. Cook. She is Sr. Vice President of Early, Cassidy & Schilling, Inc. in Rockville, MD. |
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| NASBP’s 2007 Regional Meetings |
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| Mark your calendar and make your hotel reservations now for your Regional Meeting. Space is limited for each of the following meetings. We strongly suggest that you make your reservation before the deadlines listed below. The block of rooms available at the special NASBP group rate could sell out before the room cut-off date. Since rooms are held on a first-come, first-served basis, NASBP cannot guarantee an accommodation once the room block is sold out.2007 Regions 8, 9, 10, 11 Annual Meeting Sawgrass Marriott Resort & Spa, Ponte Vedra Beach, FL July 26 – 28, 2007* Reservation Deadline: Monday July 2, 2007 * To make reservations, contact the Sawgrass Marriott Resort & Spa at 800-457-4653/904-285-7777; should the Sawgrass Marriott sell out of NASBP room block accommodations, please call for information on overflow hotel options: Bethany Hillinger – (202) 464-1178, Susan Ostrander – (202) 464-1176 * Group Name: NASBP GROUP A one night deposit is required at time of making the reservation. This deposit will not be refunded if the reservation is cancelled less than 48 hours prior to check-in. Click here to download the PDF brochure. 2007 Regions 4, 5, 6, 7 Annual Meeting * Special NASBP Single/Double Room Rate – $179 plus applicable taxes plus a daily resort fee of $9.95. This resort fees covers: unlimited use of the resort fitness center, all pools and and beachfront facilities, preferred guest pricing for on-site golf and tennis, high-speed internet access in all guest rooms, free parking at resort, shuttle service to the Cherry Capital Airport, and more. Click here for more information about the Grand Traverse Resort. 2007 Regions 1, 2, 3 Annual Meeting * Special NASBP Single/Double Room Rate – $195 plus applicable taxes Click here for more information about the Laguna Cliffs Marriott Resort. Visit our calendar of events online by clicking here. |
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| Welcome New NASBP Members and New Affiliate |
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| NASBP welcomes the following new members and the new affiliate who have joined the Association since the last issue of Pipeline. | |
| NEW MEMBERSABD Insurance and Financial Services, Inc. www.cybersure.com Seattle, WA Key Contact: Kathleen MitchellArthur J. Gallagher & Co. of California, Inc. www.ajg.com Fresno, CA Key Contact: Wayne Lamb Construction Bonds, Inc. Orgill/Singer & Associates, Inc. Payne Financial Group, Inc. Takeuchi Insurance Associates NEW AFFILIATE The Hanover Insurance Company |
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| Treasury Announces Changes to the T-List |
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The Department of the Treasury’s Listing of Approved Sureties (Department Circular 570) as of June 30, 2006 has been updated to reflect:
For a complete listing of all states where these companies are licensed to transact surety business, please refer to the Circular 570 at: http://fms.treas.gov/c570/c570.html |
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| Briefly Noted |
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Positions |
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| 1) OLD REPUBLIC SURETY COMPANY Old Republic Surety Company has a new underwriting opportunity due to growth in the Wisconsin/Michigan territory. With 15 straight years of profit, and written premium growth for a sixth straight year, we offer strength and stability for the right career-minded individual.Location: Milwaukee, WI Position: Contract/Field UnderwriterResponsibilities:
Requirements:
Includes a company car and bonus programs.Contact: |
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| 2) MARSH Marsh, the world’s leading insurance broker and business risk adviser, has 26,000 employees and provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with approximately 55,000 employees and approximately $12 billion of annual revenues. MMC also is the parent company of Guy Carpenter, Kroll, Mercer Human Resource Consulting, Oliver Wyman and Putnam Investments. MMC’s stock (ticker symbol: MMC) is listed on the New York, Chicago, Pacific, and London stock exchanges. MMC’s Web site is www.mmc.com. Marsh’s Web site is www.marsh.com.Location: Morristown, NJ Position: Client Representative I – SuretyDescription: A Client Representative assists brokers and clients in meeting surety bonding needs. The Client Representative is the day-to-day point person on assigned accounts. The Client Representative needs to understand the clients’ surety requests, interact with the respectively insurance carrier(s) and then respond quickly to proper parties. Responsibilities:
Qualifications:
How To Apply: 1. Visit http://careers.marsh.com/ Questions Contact: |
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| 3) CNA SURETY CORPORATION CNA SURETY CORPORATION, one of the largest U.S. surety companies, currently has two underwriting opportunities in the following locations.3a) Location: Farmington Hills, MI Position: Underwriting ConsultantResponsibilities:
Requirements:
Contact: Visit www.cnasurety.com for more company information. 3b) Location: Seattle, WA Responsibilities:
Requirements:
Contact: Visit www.cnasurety.com for more company information. |
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| 4) HCC SURETY GROUP HCC Surety Group is a surety bond specialty company and subsidiary of HCC Insurance Holdings, Inc., and seeks experienced Marketing Representatives for its Northern and Southern California territories to introduce and implement an internet-based program to company agents/brokers. The home office is located in Los Angeles, CA near LAX airport.1st Position Location: Los Angeles, CA near LAX airport (with territories in Southern CA) 2nd Position Location: Sacramento, CA (with territories in Northern CA)Positions: Two Marketing Representatives Description:
Responsibilities:
Requirements:
If your experience matches these requirements, please send your resume with a cover letter and include salary history/requirements. Salary DOE/ full benefits. Contact: HCC Insurance Holdings, Inc. and its subsidiaries are equal-opportunity employers. Please note that the Company will not pay for any moving or relocation costs associated with a change in location. For more information regarding our company, please visit our websites at www.hccsurety.com and www.hcch.com. |
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| $66 Million in Private Projects Bonded, Thanks to Tiger Trust Inductees |
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Two individuals and an agency will be inducted into SIO’s prestigious Tiger Trust for persuading private construction owners to require bonds on $66 million in projects in 2006. David R. BradburyDavid R. Bradbury, Murray Insurance Associates Inc., Lancaster, PA, convinced Franklin & Marshall College, not once but twice, under severe time and scheduling constraints, to require its contractor to specify subcontractor bonds for the $45 million Life Sciences Building.
The original contractor was heavily promoting subcontractor default insurance, but Bradbury persuaded the college to require performance and payment bonds instead. Then the college and its contractor parted ways and the second contractor also advocated subcontractor default insurance. Once again, Bradbury reiterated the shortcomings of default insurance relative to surety bonds. The college, despite extreme pressure from the contractor, wisely listened to Bradbury and required subcontractor bonds. Thanks to him, 16 subcontract bonds were written. “On behalf of Franklin & Marshall College, I would like to thank you for the time and effort you committed to educate our staff on the value of utilizing surety bonds in our construction project,” said Barry Bosley, Associate VP for Administration, Franklin & Marshall College. “In addition, your insight detailing the differences between [subcontractor default insurance] and the surety bond product was influential in our decision making process.”
A group effort by J. Kevin Hughes and Thomas McGovern of Gibson Insurance Group, South Bend, IN, convinced Madison Center to bond two of its projects – a $16 million mental health facility and a $3.3 million child day care center. The bonds generated $110,000 in premium. “On behalf of Madison Center I would like to thank Gibson Insurance Group for stressing the importance of requiring performance and payment bonds for our new facilities,” said Andrew Poole, Chief Financial Officer, Madison Center Inc. “Your influence and advice helped persuade Madison Center to require surety bonds for these two high profile projects.” Jason Gusso
“Jason emphatically stated that protecting our project with a contract surety bond was an excellent idea and an outstanding risk management tool,” said Steve Johnson, Facilities Manager, Home Federal Bank. “I appreciate Jason taking the time to explain the benefits of bonding and the practical application of using surety on our project.” Bradbury, the Gibson Insurance Group, and Gusso will be inducted into the Tiger Trust at the National Association of Surety Bond Producers’ annual meeting April 25, 2007, in Phoenix, AZ. They also will be recognized at The Surety & Fidelity Association of America’s annual meeting May 10, 2007, in Washington, DC. Because the private sector offers the greatest potential for contract surety growth, it is important for surety professionals to persuade private owners and lenders to specify surety bonds on their projects. For free materials and information on bonding private projects, visit SIO’s online store. NASBP Meeting Photos To view photos from the awards presentation at the NASBP annual meeting, visit the SIO Web site.
Fourteen local surety associations (LSAs), plus outstanding contributions from four individuals, made 2006 an especially good year for promoting contract surety bonds. To recognize these organizations’ and individuals’ efforts, SIO presents the Silver, Gold, and Platinum Awards for Excellence in Surety Bond Promotion. Silver Award The Silver Award for Excellence in Surety Bond Promotion recognizes local surety associations that conducted at least five promotional activities in 2006. Three LSAs have won the Silver Award:
Gold Award The Gold Award for Excellence in Surety Bond Promotion recognizes local surety associations that conducted 10 or more promotional activities in 2006. Eleven LSAs have won the Gold Award:
Platinum Award Only 11 Platinum Awards for Excellence in Surety Bond Promotion have been given since 1998. This award recognizes individual NASBP and SFAA members who have undertaken special initiatives to promote contract surety bonds. This award is not based simply on the volume of activities, but takes into account the impact of the member’s actions in promoting the value and benefits of contract surety bonds. Three individuals have won this award:
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Gibson Insurance Group
Jason Gusso, Gusso Surety Bonds Inc., Sioux Falls, SD, persuaded Home Federal Bank to require a surety bond on its $1.7 million branch building because, while its general contractor had an excellent reputation, a surety bond provided the “umbrella” protection the bank needed.
Mike Battenfield, The Hartford, Heathrow, FL – Battenfield has demonstrated genuine leadership of the 
Matt Curran, CNA Surety Corp., Maitland, FL – Curran has been actively involved with the Florida Surety Association for several years, leading the charge against onerous bond forms in Florida, meeting with state legislators, and actively promoting contract surety bonding to public owners and contractors. Curran and Battenfield, backed by members of the 
Donald D. Burden, Zervos Group, Southfield, MI – Thanks to Burden’s efforts at Michigan Contractor Assistance Program seminars, several emerging and minority contractors have been prequalified for surety. He personally assisted at least six minority contractors with their bonding needs. One Minority Business Enterprise who does surveying, environmental, and general construction went to Burden for help. He recommended a construction CPA and helped him prepare for the meeting with the surety underwriter. The MBE started off small with personal credit and now qualifies for standard, traditional surety in the $500,000-$1 million range.
Michael D. Specht, Minard-Ames Insurance Group, Phoenix, AZ – Specht’s efforts are helping emerging contractors understand what surety bonds are all about. He teaches practical accounting and finance so participants gain skills to help them improve their bonding capacity and understand how information provided in the field affects the information provided to the surety. He also teaches bonding to students and contractors. He is active in several construction organizations and is President of the Get Important Surety Industry News & Info
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