NAPSLO’s Presidents Share Commitment to Wholesale Agency System

Both Timothy M. Pedersen, outgoing president of the National Association of Professional Surplus Lines Offices Ltd. (NAPSLO), and John Latham, incoming president, are passionate about their dedication to the wholesale agency system.

In addition to taking over the presidential duties from Pedersen, Latham will continue to spread the word on the vital role that surplus lines play in the industry.

“[The presidency] is quite an honor for me because I’m only the third company representative to be president, and the two before me—Kevin Brooks and Paul Springman—are pretty nice company to join,” said Latham, president of Richmond, Va.-based Colony Insurance Company. “So I’m excited that the agents are entrusting me with this and I hope to do them a good job.”

Pedersen, who is president of Chicago-based wholesale broker Travis-Pedersen and Associates Inc., is pleased that a company member is getting a chance at the presidency again. “In particular—John,” he said. “We joined the board the same day and have worked closely for years…and with the time and effort and hard work that he’s put into it, he’ll do a great job.”

Since it was founded in 1975, NAPSLO has become the authoritative voice of surplus lines. During his term as president, Pedersen tried to stick with this theme for NAPSLO’s 25th anniversary year. “In this time of unprecedented change, with legislation and technology right at the forefront, I tried to simply build on what was good and constructive in our first 25 years. I also addressed the opportunities in the future, keeping the surplus lines market out there for the commercial lines insurance consumer,” he explained.

With his goals in place, Latham is ready to fill Pedersen’s shoes. “What we want to do first is try to continue the job that we’ve always done in promoting the value of the surplus lines industry—and in particular, the wholesale agent,” Latham said. “NAPSLO continues to be a wholesale agent-driven organization, and we want to continue to promote the existence of, and the value, that the wholesale agent represents to solving insurance problems.”

In addition to that, there will be a continuation of some of the projects and strategies that the association initiated in 1997, including the NAPSLO strategic plan document. “Having had the plan in place now for three years, most significant amongst the updating issues is that we intend to provide more focus in the future to promoting surplus lines and the wholesale distribution system,” Pedersen said.

Latham agreed that this will be a top priority for NAPSLO in the year ahead. In order to move forward with this project, Latham plans to promote the idea of what NAPSLO membership represents to its various constituencies. “We have policyholders, retail agents, regulators, legislators and rating agencies that all could gain a better understanding of what being a NAPSLO member means,” he said. “We really want to do an even better job of having people understand…what it means when you have the NAPSLO logo on your business card or letterhead.”

The NAPSLO logo, inscribed with the Latin phrase “Uberrima Fides,” which means “in the utmost good faith,” serves as a symbol of the professionalism and purpose of the members and the association. Applicants must meet financial and conduct standards in order to join NAPSLO. With deregulation of commercial lines and Gramm-Leach-Bliley, the industry is seeing regulation changing more than it has in the past 50 years. Deregulation, which already exists in the form of surplus lines, is something that Latham said he will be paying close attention to in the upcoming year.

“I think we’ll continue a strong advocacy, first of all, of opposing deregulation, only because we think that…we already represent a deregulated market and a solution to what they’re trying to achieve through deregulation,” Latham said.

NAPSLO determined that deregulation was going to happen, so it decided to promote the automatic export provision whereby if a risk was deregulated, it should be deregulated for all, eliminating the diligent search requirement.

“Having acknowledged that deregulation has already been passed in several states, and likely will be pursued in some others, we at least want to promote very aggressively the inclusion of automatic export wording in any legislative developments,” Latham said. “We’ve had some success more recently with that and we think that at least gives us a reasonably level playing field for the surplus lines market.”

Speaking of success, since 1994, the A.M. Best Company has performed an annual survey of the excess and surplus lines market and has found that its solvency record is as good, if not better, than the overall industry.

Latham feels that under the leadership and guidance of Dick Bouhan, NAPSLO executive director; and Andy Frazier and Jim Griffith, both company directors for NAPSLO; the association has promoted a better understanding among legislators and regulators as to what surplus lines is all about.