The year was 1898. Thirty years had elapsed since Virginia’s now valuable property was a heap of smoldering ruins following the Civil War. The Commonwealth was once again enjoying its prophesy of the past: a story of development, progress, and public spirit such as has few parallels.
A nation once primarily made of farm land was swiftly becoming a world leader with growing cities, busy with manufacturing and commerce. Businesses were becoming so large that they were able to squeeze out all rivals in the field. The political climate was ripe for government control which had resulted eleven years earlier in the enactment of the Interstate Commerce Act and, eight years earlier, in the enactment of the Sherman Anti-Trust Act. The 45-state nation was enjoying a great business boom, while seeking to expand its dominion outside its borders through the Spanish-American War.
It was during this period that two dozen founders of our present organization met to form the Virginia Association of Local Fire Insurance Agents. They had a need to form an organization to do together what one or two could not do. For the times were geared toward big moves by big men with big money. In business, monopoly was still in vogue; in politics, protectionism was the national mood; and in economics, laissez-faire was still the rule.
What kind of men were they then, who gathered in Lynchburg during the fall of the final months of the waning century? What questions did they raise and what answers were they hoping to find? Answers to these questions are not easy to find. Records of the earliest days of the association were either lost, or destroyed, perhaps ironically by fire. Or perhaps these men had not planned on planting the foundation of a 100-year-old organization and therefore simply did not consider their actions important.
What we do know, is that this was not the first time that a group of insurance men came together to achieve a mutual purpose. The newspaper morgue of the December 13, 1895 "Richmond Dispatch" contains this brief article:
"The fire insurance agents of the state of Virginia held a special meeting at the Exchange Hotel yesterday. Prominent men engaged in this line were present from all parts of the state, and a permanent organization was effected under the style ‘Local Agents Association of Virginia.
"The object of this organization is to promote friendly interchange amongst members, and to forward correct practices in the state. This association has no authority or control as concerns rates."
But, this first recorded meeting did not become the organization it had hoped to become. There is no evidence that it survived in any form, however it is reasonable to believe that some of these men were present at the first annual meeting in 1899.
The group convened for their third annual meeting in Roanoke’s Pythian Hall in the summer of 1901. At 11:00 A.M. sharp, the gavel sounded and the members warmed to their tasks by approving the financial report: Total receipts: $92.32; Total disbursements, $67.62; Balance on hand: $24.70.
Then they settled down to hammer out a Constitution and Bylaws. That first paper reflected many concepts of how insurance men would work together for the first time as a unified statewide unit. Dues were set at $2 in towns or cities of 5000 or more inhabitants, and $1 for country agents in towns of less than 5000. Membership requirements were stated without flourish: "Any local agent or agency of one or more insurance companies doing business in the state of Virginia may become a member of this association, provided he is not a general agent or special agent of any company."
Most importantly, these founders of our present day association had an innate feeling for the great principles on which the association would build and grow. First, they passed a bylaw allowing the president to appoint a committee on grievances which would investigate and take up "any complaints of bad practice on the part of either agents or companies doing business in the state of Virginia and endeavor to have same corrected."
It was a small wonder that these corrections were needed since, at the time, the industry did not have a State Corporation Commission, or an insurance commissioner, or even any type of qualification law for agents. But these agents not only recognized that change was needed, they recommended, through a second bylaw, that "the president shall appoint a committee on legislation to consist of five members." They were going after laws to help the cause and combat bad practices. In fact, one member offered this solution: "We believe it to be the best interests of the agents, companies, and insuring public to have a commissioner of insurance. If we can get the right man in office, he can be of incalculable benefit in getting wise laws passed by our legislature."
The business session concluded with the adoption of the slogan that remains only slightly altered today: "To support right principles and oppose bad practices in fire underwriting." The day was done but what’s a convention without a little fun? So all two dozen Board members boarded a trolley car and enjoyed a ride through Roanoke - sucking in their breaths as they clipped along at 8 miles per hour!
The following year, they met in Norfolk. The Secretary reported a membership of 74 agents - an 89 percent increase over the previous year. Some of the subjects discussed that year included the proposal to pursue a "Fire Marshall Law;" dual agencies, overhead writing, corrupt practices of every kind, paying brokerage of 10 percent to foreign brokers, and the credit system in which agents had to wait two or three months to collect their money.
The words delivered at the 1902 convention reflect the spirit that was to be passed down throughout the next 100 years. "Gentlemen, I want to impress upon you three all-important factors in the successful prosecution of our business: loyalty to our brother agents, loyalty to our patrons, and loyalty to our companies." Interestingly, these were the very audiences to which our national Code of Ethics was addressed - "To the public; To the companies; and To fellow members" - yet the national association did not adopt its Code of Ethics for another 27 years, in 1929. Another example of the foresight of our Virginia Founding Fathers!
The highlights of the next several years could be hailed as milestones for both the association and for the citizens of the state. Through the combined work of the Legislative Committee and the grassroots political contacts developed by members at large, the association succeeded in gaining its major goal at that time. The legislature in 1906 passed a law establishing the first Bureau of Insurance, and appointed Colonel Joseph Button, who had served as Clerk of the Senate in 1898, as our first Commissioner.
The outstanding achievement of the association in 1921 appears to be the fact that the name was changed to "Virginia Association of Insurance Agents," a name that stood until 1978 when the Board of Directors, in an effort to maintain consistency with the national association, changed its name again to the Independent Insurance Agents of Virginia, Inc.
In 1929, The Crash came, and for the next several years the association must have gone through the same turmoil as the rest of the nation. During this time, the Virginia agents’ voices joined to protest the actions of the Commodity Credit Corporation directly to President Roosevelt. The CCC had apparently seen fit to place all the insurance on cotton financed through its facilities with only three persons: a New York broker, a Texas general agent, and a North Carolina agent. Virginians have been protesting the encroachment of federal power ever since.
1935 was a landmark year as it marked the beginning of sending out monthly bulletins to members. In 1936, the association members were asked to pledge a sum that would net the association $6000 with which to finance the employment of a manager, set up an office, and blossom out legislative and educational endeavors. In December, 1937 a manager was hired at a salary of $1675 for the first six months. Quite a handsome salary in a time when $1200 was considered a very high salary, enough to marry and raise a family.
In 1939, the Association began on of its longest lived public service programs, that of Highway Safety. And in 1940, the first educational "Short Course" was organized and held at the University of Richmond. A forerunner of the association's continued emphasis on education, the "Short Course" attracted more than 300 insurance agents and staff members.
The following years saw continued growth and fine-tuning. As the Second World War caught the United States, some trying times faced the association. The ban on tires, gas rationing, the halt of auto manufacturing severely limited automobile use and the need to find insurance. The association however participated in all patriotic efforts to win the war on the home front, aiding in war bond sales, serving on ration boards, draft boards, Red Cross and Community Chest drives, and setting up entertainment clubs for military men. The attendance prize at the convention in 1943 was an $18.75 war bond. That same year, the VAIA proposed emergency legislation permitting the reinstatement of a resident agent’s license of local agents in the armed services without requiring an examination upon their return to civilian status. The VAIA’s commitment to supporting veterans of the war earned national publicity in 1946 when its member agencies provided on-the-job training for returning service men under the G.I. Bill who wished to enter, or re-enter the insurance business.
A major move in 1947 called for the hiring of T. Nelson Parker, to be employed as the first lawyer to represent the association. The VAIA charged Mr. Parker with reviewing legislative bills before they were to be endorsed by the VAIA. Parker would go on to become the Virginia Insurance Commissioner and, in 1961, was elected president of the National Association of Insurance Commissioners.
Undoubtedly, the most historic convention of the day was the Golden Anniversary in 1948 in Virginia Beach. The president presiding over the affairs of the association during its Golden Anniversary year was J. Victor Arthur, of Winchester. Twenty-five years later, his son, J. Victor Arthur, Jr. presided over the 75th Diamond Anniversary convention. Mr. Arthur, Sr. served at a time when his son had not yet entered the insurance business, He told the attending members, " It is my feeling that if we did not have an association of agents in Virginia, we would have to form one today." This was formal testimony to the success of the organization and its value in serving its members.
Beginning in 1950, records give evidence of a continued struggle with banks entering the insurance business. The matter was already of such high importance that a committee was formed to discuss the matter with the Virginia Bankers Association. The matter would continue to be high on the state association agenda for the next 41 years, and would become the highest legislative priority for the national association, and the genesis of the National Legislative Conference.
These times would see the passage of a resolution calling upon companies to come forth with some type of coverage against uninsured motorists, and plans to introduce a bill in the 1958 General Assembly Session which would make the Uninsured Motorist Endorsement, plus a property damage feature, a standard part of all Virginia automobile liability insurance policies.
The VAIA State National Director would, in 1958, introduce discussions on antitrust in the industry which would continue to this very day. At that time, the SND counseled that the United States Senate was in the process of investigating the insurance industry and asked every member to write their senators and congressmen advising them that VAIA members believed in the state regulation. In fact, on August 26, 1959, Virginia Insurance Commissioner T. Nelson Parker appeared before the U. S. Senate sub-committee on antitrust and monopoly.
This time would also see the beginnings of group insurance programs for the VAIA members, and the Board appointed a committee to study group accident, health, and major medical coverage.
The growing emphasis on legislative involvement to protect the industry was reflected in 1960, when the VAIA Board would begin sending Legislative Bulletins to the entire membership throughout the 1960 General Assembly session. This practice has continued since that date, keeping the Virginia independent agent fully informed of legislative matters affecting his ability to perform his day-to-day business.
The Association would begin a history of supporting the American Agency System by dealing directly with those companies whose measures seemed to go against this principle. Through resolutions, letter and personal visits, the VAIA would go on record discouraging company licensing of automobile dealers for marketing auto insurance and any move toward direct solicitation of insurance business.
In addition, the concerns of the small agent would begin its history of attention within the association. In 1965, the Southwest Virginia Committee surveyed agents there regarding companies not offering coverages in this area. These concerns were discussed with Commissioner Parker. Even today, the IIAV continues to fight on behalf of the small agent. Based on survey findings, the IIAV’s 1988 Small Agents Task Force sent a letter to all Virginia Property and Casualty companies requesting their adoption of marketing practices which would "assist in the perpetuation of the small agent in Virginia."
The late sixties would see a continued growth in the legislative involvement of the independent insurance agent. The VAIA hired former Virginia Governor, Albertis S. Harrison, Jr., as a legal consultant who, with members of the VAIA Board, would propose and see to fruition a Habitual Offender Law in Virginia.
On March 15, 1969, Virginia Financial Services Corporation (VFSC) was formed as a for-profit subsidiary of the VAIA. It was in November of that year when VFSC would announce its first income-producing program: Insurance Agents and Brokers Errors and Omissions Insurance. VFSC would continue to seek programs for the IIAV member, offering substantial discounts for programs which, secured individually, would have been prohibitively expensive, or perhaps unattainable.
VAPAC, the Virginia Agents Political Affairs Committee, was formed in 1975 to help put more weight behind the independent agents’ voice in the Virginia General Assembly. The VAIA once again would deal with a trend facing the Virginia market, that of decreasing availability. A legislative program including meeting with the Governor, brochures, media visits, General Assembly visits, and a speakers bureau would discuss competitive pricing in an effort to open the market.
During the seventies, the Independent Insurance Agents of Virginia, whose name was changed in 1978, would continue to increase their role in legislative matters, on both the state and national levels. Records provide evidence of association involvement with matters regarding Federal Flood Insurance, the Insurance Services Office, architectural barriers to handicapped persons, no-fault automobile insurance, medical malpractice insurance, anti-piracy, continuing education and much more.
The extended legacy of the 1981 General Assembly saw the creation of the Insurance Information and Privacy Protection Act. The Act mandated further responsibilities on the already overloaded agent and established standards for the collection, use and disclosure of information gathered in connection with insurance transactions by agents, companies, and insurance-support entities. The Privacy Act also changed the Adverse Underwriting Law giving insureds 90 days to request information after receiving notice of AUD, a summary of the insured's rights, and no longer allowed agents to charge for copies of personal information used in connection with an AUD.
With the growing emphasis on agency automation, the IIAV in 1981 formed Automation Users Groups to help sort through the issues raised with these new technologies. The Agency Management Committee designed Agency Management Seminars to help address issues such as agency automation, using a computer to rate personal lines risks and financial planning.
The IIAV took its "show on the road" beginning in 1982 when Legislative Roadshows helped inform the local agents of the legislative issues facing him and encouraged support of the association’s legislative efforts. The Personal Lines committee pushed for and received an increase on VPIA commissions from 8% to 10%, and credits were given for clean drivers insured in the Virginia Automobile Insurance Plan.
In 1983, the IIAV member, like his counterparts across the country, was faced with a soft market and significant changes were bring made in the way agents conducted their business. For the first time, talks began on both the state and national level regarding a merger of the IIAA and the Professional Insurance Agents (PIA). Although IIAA members felt that the merger would bring about a more unified voice and less redundancy of efforts (and costs), the issue came to a close in 1993 when the PIA resoundingly voted against the merger. This year would see the first "Day at the Capital," which would establish the association's presence during the General Assembly and allow member agents a first-hand look at the lawmaking process.
The Independent Agents continued to battle the issue of banks entering the insurance business throughout the 1980s, while forging ahead with improvements for both the public and the industry. In 1985, the Fair Plan Application was amended to include the Notice of Adverse Underwriting Form, as a result of input from IIAV members. This would eliminate one more form for the agent to keep track of. Also, the maximum limit of liability for commercial property was increased from $500,000 to $1,000,000 at any one location.
The Legislative Committee played a major role in the recodification process as agent’s interests were protected by IIAV testimony and advice given to the Code Commission during deliberations. A WATS line was added to the IIAV which allowed members toll-free access to the IIAV. In December of 1985, the Virginia Compensation Rating Bureau ceased to be in operation, in favor of NCCI (National Council on Compensation Insurance).
1986 saw the passage of the "Binder Bill" which mandated financial institutions to accept binders for closings and renewals, participation of members and non-members alike in HO-84 seminars, CGL update seminars, Errors and Omissions seminars, and the introduction of a new CSR week-long course of instruction. Reflecting one of the nation’s fads, the IIAV began its very own version of Trivial Pursuit with our "IIAV Pursuit" program awarding up to 20 percent dues offset through a member’s participation in the IIAV’s services, programs and products. It was also the year that one of "our own," Mr. Dwight Dillon, of Basset, Virginia, was elected President of the Independent Insurance Agents of America.
Perhaps the biggest issue in 1991 was the end of an age-old struggle to keep the banks and savings and loans out of the insurance business. The 1991 General Assembly ended with the Senate’s passage of the bill which had been held in check for almost three years, and an issue which had faced our Association since its inception. As usual, the IIAV fought until the eleventh hour, meeting with the Governor’s Chief of Staff and Chief Legislative Aide in an attempt to either have the bill vetoed or substantially amended to include safeguards not present in the passed version. However, with only minor amendments by the Governor, the bill became law. Victory was ours, however, in deferring trust accounting despite a strong effort among state officials to see this bill passed.
Although the 90s saw a decrease in membership due to mergers and acquisitions, buy-outs, retirements, and loss of markets, the Association's response has been the same as it was for the past 90 years ... work harder on behalf of the member. While discussions of a possible merger between the IIAA and the PIA continued on the national level, Virginia took its first step in 1992-93 by consolidating members of both groups into one, more powerful, legislative committee. While completely different from previous years, the format provide highly effective. The centerpiece of the joint committee’s legislative program was a mandatory Continuing Education requirement for all licensed agents. The bill, which became effective January 1993, was passed by both houses unanimously. The committee also worked toward a compromise on the trust accounting issue which resulted in a bill more fair to all parties involved.
The 1992-93 year saw the IIAV’s first female president at the helm. Vernell Hogan, AAI, CIC, led the then 95-year-old trade association through a successful year which involved steps toward Workers’ Compensation reform deemed the "greatest single all-industry effort to improve the workers’ compensation system in Virginia," increased community service, a newly formed Accredited Customer Service Representative (ACSR) Committee to work with the IIAV Education Committee in developing classes for the new continuing education requirement, and a profitable year for VFSC. While merger talks with the PIA ended on both the state and national levels, the IIAV forged ahead to protect the interests of its members.
The silver anniversary of the IIAV’s profit making subsidiary, Virginia Financial Services Corporation (VFSC) marked a highlight of the IIAV’s 1993-94 year. With products such as Errors and Omissions Insurance, life and health programs, disability plans, software programs including a workers compensation rating program, premium financing programs, employee evaluation tools, sponsorship of continuing education classes, and a new 24-hour IIAV Information Network, VFSC continued to fulfill its mission of providing new programs, products and services for the IIAV member.
In addition to legislative efforts which resulted in mandating that lenders accept in-force homeowners policies at the time of refinancing and an extension of the continuing education deadline, 1995 saw a greatly improved workers’ compensation environment. The 1996 legislature opened with consideration of 20 different workers’ compensation measures, most of which were supported by labor and trial lawyers. Without the continued effort of the well-recognized and effective IIAV lobbying team our recovering workers’ compensation market surely would have suffered.
In 1901, when our founding fathers wrote its original bylaws, they provided that a five- member legislative committee should be formed. Those five men would have been overwhelmed at the 2709 bills which were introduced during the 1998 General Assembly, many of which directly affected the insurance industry and were tracked by our highly respected lobbying team. The House of Delegates finally passed HR 10 and, if the Senate does the same in 1999, a legal playing field for agents and bank-owned agencies will be ensured. Also in 1998, a bill creating an Insurance Fraud Bureau was passed, providing an entity through which the insurance consumer could be protected against a crime costing Virginia families more than $955 per year. Otherwise, as a result of the ever watchful eye of the IIAV, the insurance climate in Virginia remained safe for another year, with no significant legislation enacted.
For 100 years, membership in the Independent Insurance Agents of Virginia has given our members the support they need to achieve success in a highly competitive insurance marketplace. Through advanced technological services such as electronic communications, agency and automation services including updates on Workers’ Comp issues and Company Customer Service Reports and Company Visits reports, conventions, meetings, and publications in which the latest industry products and trends are reported, the IIAV provides its members with cutting edge information and training. Our respected legislative presence maintains our voice in the Virginia General Assembly and in the Commonwealth’s lawmaking process. Educational services and continuing education courses continue to be our hallmark as we enter the 21st century. And with our impressive array of insurance products such as Errors and Omissions, Accidental Death and Dismemberment, Group Life and Health, Personal Umbrellas, RLI In-Home Business, and Short and Long-Term Disability, our member agents can enjoy the cost-effective benefits their membership provides.
Guiding consumers and the Independent Agency System in Virginia through the changing landscape of the industry, drawing on a century of experience and leadership...
...that is our job and we will continue to do it for the next 100 years and beyond.