NAPSLO 2014 Annual Report...NAPSLO SQRU ANNUAL REPORT T •Sponsored 2014 A.M. Best SpecialReport-U.S. Surplus Lines Market Review, including a SQ-year retro - spective since the report

2 0 1 4 A N N U A L R E P O R T

Celebrating 40 Years

The National Association of Professional Surplus Lines Offices (NAPSLO) is a professional trade association representing the surplus

lines industry and the wholesale insurance distribution system. NAPSLO’s membership consists of approximately 400 brokerage

member firms, 100 company member firms and 200 associate member firms, operating in 1,500 offices representing approximately

15,000 to 20,000 individual brokers, insurance company professionals, underwriters and other insurance professionals in the 50

states and the District of Columbia. NAPSLO is unique in that both surplus lines brokers and surplus lines insurance companies are

voting members of the Association; thus NAPSLO represents and speaks for the surplus lines wholesale marketplace.

Since its incorporation in 1975, NAPSLO has become the authoritative voice of the surplus lines industry, advocating for the

industry’s vital role in the insurance marketplace and in providing innovative solutions for complex insurance risks. Often called

the “safety value” of the insurance industry, surplus lines insurers fill the need for coverage in the marketplace by insuring those

risks that are declined by the underwriting and pricing processes of standard insurance carriers. With the ability to accommodate

a wide variety of risks, the surplus lines market acts as an effective supplement to the standard market.

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ESNAPSLO is an association of insurance brokers, agents and underwriters who

are committed to the wholesale value distribution system and the surplus

lines industry. The Association provides networking opportunities, education

and career development programs, and regulatory and legislative advocacy

on behalf of its members.

NAPSLO is committed to the whole-

sale distribution system, freedom

from rate and form regulations, high

ethical standards, professionalism

and wholesale value.

C O N T E N T S :

Value of Membership Services 2Convention Committee 5Education Committee 7Legislative Committee 8Political Action Committee 10Communications & Technology Committee 11Career Awareness & Internship Committee 12Mid-Year Committee 13Membership & Ethics Committee 14Budget, Finance, Audit & Investments Committee 15NAPSLO Financials 16Past Presidents Council 17Board of Directors 17

On behalf of the NAPSLO Officers and Board of Directors, I am pleased to present NAPSLO’s 2014 Annual Report which highlights the Association’s financial health and notable accomplishments of the past year. I urge you to read this report.

I believe it highlights how your firm’s membership works for you, and I hope it makes you proud to be a member of NAPSLO.

NAPSLO’s successes during the year include record-setting attendance at association networking events, strong attendance at NAPSLO schools, great progress in state and federal regulatory and legislative advocacy and growth in NAPSLO’s internshipand career awareness initiatives. More than 600 industry leaders attended the 2014 NAPSLO Mid-Year Leadership Forum inScottsdale, and the 2014 NAPSLO Annual Convention in Atlanta was the largest in the Association’s history – with 3,966 registered attendees.

The Association’s schools and career development opportunities also had many successes last year. The E&S School, MarcusPayne NAPSLO Advanced School and the Executive Leadership School all continue to receive exceptional ratings from students.The newly-introduced Professional Selling Skills School was also offered in 2014 to sold-out classes.

NAPSLO’s legislative and regulatory advocacy at the state and federal level is a key member benefit and our priority continues to be promoting the uniformity and efficiencies intended by the NRRA. As a strong supporter of the state-based regulatory system for insurance, NAPSLO directs significant effort and resources towards state legislative advocacy. This year, our Legislative Committee and Board also approved guiding principles for uniformity in state surplus lines regulatory requirements, which NAPSLO will leverage in its advocacy nationwide to protect the interests of our industry during the year. At both the state andfederal level, the Association monitored a variety of other issues that impact surplus lines and advocated as appropriate to improve the regulatory and reporting climate for our industry.

We remain focused on educating federal lawmakers about issues facing the surplus lines insurance industry that are important toour members. Critical to this work is the NAPSLO PAC and its support to candidates for U.S. Congress whose philosophies and atti-tudes are consistent with the goals of NAPSLO, the surplus lines industry and the wholesale distribution system. Thank you to those123 individuals who supported the NAPSLO PAC financially this year. Your support makes this important work and advocacy possible.

The Association also continues to advocate for the value of the wholesale distribution system in the insurance marketplace. During the last year NAPSLO worked to incorporate that message consistently into its communications, both internally and externally, in conjunction with the Association’s new logo and branding. The Wholesale Value message was woven into a varietyof advertising placements as well as into earned editorial placement that NAPSLO secured throughout the year on behalf of itsmembers. NAPSLO members bring expertise and innovation to complex insurance risks, and the Association is committed tospreading that message.

The Association’s financial position is strong and that allows NAPSLO to provide valuable member services and to promote, advocate and protect our industry. Additional financial information and metrics are reflected within the Annual Report.

A sincere thank you goes to the more than 170 2013-2014 committee volunteers who helped make all of this work happen.NAPSLO’s volunteers play a vital role in providing valuable services to members, and I believe your engagement is a sign of passion and optimism within our industry. Your dedication is evident in the accomplishments highlighted in this report.

Hank HaldemanPresident, 2014-2015

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• NAPSLO invested $235,250 in stateand federal advocacy services, working on behalf of members, with primary focus on full implementation of the NRRA.

• 23 members of NAPSLO’s LegislativeCommittee and Board of Directorsmet with members of Congress andtheir senior staff to discuss the NRRA and other insurance legislative issues important to the surplus linesindustry, including a nationwide and uniform system of agent andbroker licensing through the National Association of RegisteredAgents and Brokers, renewal of theTerrorism Risk Insurance Act, privatemarket solutions to flood insurance,among others.

• Contributions to the NAPSLO PACcame from 123 individuals and totaled $65,539.

• A record-setting 3,966 members attended the 2014 NAPSLO AnnualConvention in Atlanta, an increase of3.2% over the prior year.

Increaseof3.2%• 606 members attended the 2014

NAPSLO Mid-Year Leadership Forum in Scottsdale, with attendance up 3.6% over the prior year.

The education program served 275surplus lines professionals in classroomsettings, an increase of 58% over theprior year, with the addition of theProfessional Selling Skills Schools.

Increaseof58%• Excess & Surplus Lines School,

102 attendees• NAPSLO’s Marcus Payne Advanced

School, 63 attendees• Executive Leadership School,

28 attendees• Professional Selling Skills Schools,

82 attendees• Online Courses, 482 participants.

L E G I S L AT I V E & R E G U L ATO R y A D V O C A C y N E T w O R k I N G

E D U C AT I O N & C A R E E R D E V E L O P M E N T

P R O G R A M S

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NAPSLO MEMBERSERVICES

N A P S L O 2 0 1 4 A N N U A L R E P O R T 3

• Sponsored 2014 A.M. Best SpecialReport-U.S. Surplus Lines Market Review, including a 20-year retro-spective since the report was firstproduced in 1994. The report foundthe surplus lines market is financiallystable, surplus lines carrier ratingsare strong and outpacing the standardmarket, with no financial impairmentsin the last 10 years, and growth of8.4% in 2013 DWP for domestic professional surplus lines insurers.

• Raised $301,754 to support thework of the Foundation. The Foundation ended fiscal year 2014with $6.6 million in assets.

• Committed $67,500 to scholarshipsfor 14 students.

• Conferred ALSI designation on 111industry professionals in 2014,bringing the total number of professionals to earn the designationto 2,057 since 1997.

• Placed 14 interns with 28 NAPSLOmember firms for summer positions,with an investment of $177,955from NAPSLO, even more significantinvestments from NAPSLO memberhosts, and an unmatched experiencefor talented students wishing to jointhe surplus lines industry.

• Reached more than 2,200 collegestudents with NAPSLO’s careerawareness message by presenting at 41 universities and various symposiums.

• Grew NAPSLO’s Next Generationmembership to 740, up 16.7% fromthe previous year.

Increaseof16.7%

• Launched a new www.napslo.orgwebsite, featuring streamlined navigation, a Find a NAPSLO Membertool, enhanced state-by-state legislative reporting and an updatedlook and feel to perpetuate NAPSLO’s2013 enhanced band.

• Hosted 88,851 user sessions onNAPSLO’s website, up 9.9% over theprevious year.

Increaseof9.9%• Invested $169,843 in the Wholesale

Value messaging campaign in fiscalyear 2014, generating an estimated$141,279 in earned editorial place-ment, and approximately 1.8 millionimpressions through paid advertising.

• Sent 53 NAPSLO newsletters and e-News updates to members, withan average open rate of 30.01%.

• Utilized social media to drive traffic to the NAPSLO blog and NAPSLO News.— The NAPSLO LinkedIn discussion

group has 3,321 members, an in-crease of 285 over the prior year.

— NAPSLO’s twitter feed has 1,150followers, and NAPSLO tweeted60 times during 2014, generating21 retweets of NAPSLO messages

— The NAPSLO Facebook page has335 followers and was updated 62times during the year, generating3,144 impressions.

C A R E E R AwA R E N E S S , I N T E R N S H I P &

N A P S L O ’S N E x T G E N E R AT I O N

M A R k E T I N G &C O M M U N I C AT I O N S

D E R E k H U G H E S / N A P S L O E D U C AT I O N A L F O U N D AT I O N

Since its incorporation in 1975, NAPSLO has become the authoritative voice of the surplus lines

industry. Our commitment to providing networking opportunities, regulatory and legislative

advocacy and education and career development programs for members remains unchanged.

To provide these valuable and impactful member services, the NAPSLO team collaborates with a

large number of dedicated volunteers who help ensure your NAPSLO membership is an excellent

investment. you each play an important role in maximizing the Association’s effectiveness.

As NAPSLO works to deliver great return on member investment, we want to thank each of you

for all you give back to NAPSLO and the industry as members. This report highlights NAPSLO’s

fiscal year 2014 financial position, goals and accomplishments and celebrates the strength and

relevance of the wholesale distribution system and the surplus lines industry. Thank you for your

support in these endeavors. Brady R. kelley E x E C U T I V E D I R E C TO R

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The NAPSLO Annual Convention provides an oppor-tunity for members to network and participate inprograms and presentations relevant to the surpluslines industry. It is also a forum for members to network with one another and conduct both theirindividual firms’ business and the business of theAssociation.

2013-2014 key Initiatives and Accomplishments

• Celebrated NAPSLO’s 40th birthday at the 2014 AnnualConvention in Atlanta with a record 3,966 delegates, an increase of 122 attendees over the prior year.

• Hosted a sold-out Brokers’ Club.

• Featured Earvin “Magic” Johnson as keynote speaker, presented by the E.G. Lassiter Lecture Series, sponsored bythe Derek Hughes/NAPSLO Educational Foundation. Johnson, an NBA legend and successful entrepreneur, waswelcomed by a large audience in Atlanta.

• Distributed Convention materials largely electronically allowing attendees to access registration lists online ontheir own devices or on iPads located in the registrationand information area. All attendees received daily electronic news recaps and previews of the coming day.

• Introduced a mobile application that was a user-friendly,cost-effective communication tool for NAPSLO and attendees. The app featured a schedule of events, venuemaps and attendee lists.

• Commemorated NAPSLO’s birthday with an Opening Reception that celebrated NAPSLO through the decadesand the production of a retrospective birthday video prepared for General Session.

Hank Haldeman, ChairThe Sullivan GroupLarry BalesSwett & Crawford - TampaDennis BurtonACE WestchesterWyeth CoburnCRC/CrumpChris GiadrosichCRC Insurance Services, Inc.Robert GilbertMarkel, West RegionWendy HouserMarkelStaci HughesGeneral StarElise KendallCatlin Specialty Insurance Co.Joel MooreGulf Coast Claims ServiceBryan SandersMarkelKristen SkenderUSG Insurance Services, Inc.

2013-2014 COMMITTEE MEMBERS


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CONVENTION COMMITTEE

The NAPSLO Education Committee is committed toproviding high quality excess and surplus lines educational offerings that meet the professional development needs of NAPSLO members and asso-ciated industry constituents throughout their careerswhile also meeting the education curriculum mission.


• Continued to offer and refine education and career development opportunities that support NAPSLO membersthroughout their careers. In 2014, those included:

— Excess & Surplus Lines School, 102 attendees;

— NAPSLO’s Marcus Payne Advanced School, 63 attendees;

— Executive Leadership School, 28 attendees;

— Professional Selling Skills Schools, 82 attendees

• Continued to offer online programs, including Surplus LinesCompliance and the Surplus Lines Fundamentals Course,developed in partnership with The Institutes, reaching 482participants in 2013-2014 and 2,243 since their inception inSeptember 2011 and May 2012, respectively.

• Further developed and hosted four Professional SellingSkills Schools in 2013-2014, designed for transactional brokers and underwriters featuring a small group settingwith hands-on activities that are customized for each student’s needs. The courses were fully sold and receivedvery favorable reviews from students.

• Continued to implement the NAPSLO Scholarship Program,providing scholarships to members from scheduled statesto participate in NAPSLO schools. In 2014, scholarshipswere awarded to students from Illinois for the E&S and Advanced Schools, from Pennsylvania for the ExecutiveLeadership and Advanced Schools and from North Carolinafor the E&S School and Advanced School.

Joel D. Cavaness, Co-ChairRPS ItascaJacqueline M. Schaendorf, Co-ChairInsurance House, Inc.Lisa BarnesMcClelland & Hine, Inc.Kristina Burke ComasAll Risks, Ltd.Jessica BussRockhillJim CarneyScottsdale Insurance CompanyShawn DanhouserMarkel, Midwest RegionPaul DastisNavigators Management Co. Douglas DayTravis-Pedersen and AssociatesSteve GirardMarkel, Southeast RegionGlenn HargroveMSWRandall JonesNAPSLO

Mark KrysiakArch Insurance GroupEdward LevyRPS ScottsdaleSandra MatsonNautilus Insurance GroupTricia O’NeillZurichCole Palmer General Star Brian PoleseWKFC Underwriting

ManagersBob RheeAspen InsuranceLora RobbinsAll Risks, Ltd.Greg RubelMarkel, Mid South RegionRobert Sanders, Jr.Preferred Specialty, LLCMike ShannonAxiom DevelopmentTracy WadeMaxum Indemnity Company



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EDUCATION COMMITTEE


The Legislative Committee is dedicated to promoting the legislative and regulatory interests of NAPSLO members and the surpluslines industry.


• Monitored all state and federal regulations andlegislation of interest or with potential impacts to the surplus lines industry and provided members with access to online legislative trackingtools throughout the year as state and federalbills developed.

• Continued to build upon, and support the successesof, the Nonadmitted and Reinsurance Reform Act(NRRA), including implementation of the “homestate” approach to the regulation and taxation ofsurplus lines transactions, bringing much neededefficiency, clarity and uniformity for the industry.

• Developed NAPSLO Guiding Principles on Uniformityin State Surplus Lines Regulatory Requirements.This document, approved by the NAPSLO Boardof Directors, affirms NAPSLO’s dedication to a uniform, national state-based regulatory system,and will be leveraged to encourage all states toadopt uniform procedures for the regulation andtaxation of surplus lines brokers and insurers.

• Served as a key source of information and represented NAPSLO member interests in theGovernment Accountability Office (GAO) studyand report on the implementation of the NRRA.

LEGISLATIVE COMMITTEE

• Members of the NAPSLO Legislative and ExecutiveCommittees met with more than 20 offices ofMembers of Congress during NAPSLO’s annualLegislative Fly-In in Washington, D.C. in May 2014.The Committee advocated on behalf of the NAPSLOmembership to educate Members of Congress onissues of importance to NAPSLO Members andthe surplus lines industry.

NAPSLO used time with the Members to help educate them about the surplus lines industryand to focus on three main issues impacting surplus lines: (1) the reauthorization of the Terrorism Risk Insurance Act (TRIA); (2) passage of the National Association of Registered Agentsand Brokers (NARAB II); and (3) revising the definition of private flood insurance to ensuresurplus lines insurers are eligible to provide private market solutions to consumers in need of solutions to unique and complex flood risks.

• Provided guidance to NAPSLO members to implement the Foreign Account Tax ComplianceAct in 2014.

• Issued comprehensive updates pertaining to stateand federal legislative and regulatory issues andactivities impacting the NAPSLO membership.

Lana Parks, Co-ChairThe Parks Group, Inc

James Drinkwater, Co-ChairAmwINS BrokerageNicole AllenSwiss ReH. Michael ByrneDrinker Biddle & Reath LLPPaul DeCotisDeCotis Insurance Assoc., Inc.David ErtelTravelers Excess and

Surplus LinesRobert FermHall & Evans, L.L.C.Seth FischerWestern World

Insurance GroupAndrew ForstenzerWilson ElserRonald GaborGabor Insurance Services, Inc.David GreenMaxum Indemnity CompanyDavid JohnsonCitadel Insurance Services

Alan KaufmanBurns & WilcoxDaniel MaherELANYBenjamin McKaySurplus Line Association of CADavid OcasekSurplus Line Association of ILBobby OwensRPS-LexingtonJoseph PowellPowell & Roman, LLCVincent PuglieseLexington Insurance CompanySusan RiveraV3 Insurance PartnersJames RoeArlington/Roe & Co.Jan ShemanskeNautilus Insurance GroupErnie TaylorCentury Insurance Group


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The NAPSLO Political Action Committee (PAC) managesNAPSLO’s efforts to support candidates for the U.S. House of Representatives and Senate whosephilosophies and attitudes are consistent with thegoals of NAPSLO, the surplus lines industry and thewholesale distribution system.


• Received $65,539 in contributions from 123 individualNAPSLO members.

• Contributed $63,500 to federal candidates whose philosophiesare consistent with NAPSLO members’ goals for the surpluslines industry.

• Enhanced efforts to raise awareness about the purpose ofthe NAPSLO PAC, and the importance of member support,with more targeted messaging in NAPSLO publications andan updated presence on the NAPSLO PAC website.

Robert Greenebaum, ChairSwett & CrawfordJosh BowenCentury Ins. Grp-EnvironmentalJohn CurryAtlantic Casualty Insurance Co.Chris DayHouston Casualty CompanyBrian EvansSwiss Re Corporate SolutionsJohn FarreyBurns & Farrey, P.C.Keith HinsonSLB Insurance Group of LAMarie HohenseeAgency Management Corp.Michael JamesChesterfield Insurance Brokers

Henry LopezNavigators Management Co.David PalmerGenesee GeneralDavid SchwartzRIBSChris TimmCentury Insurance GroupSharon WardBurns & WilcoxDouglas WeisskopfHudson Personal UmbrellaLiz WhitePeachtree Special Risk

Brokers


POLITICAL ACTION COMMITTEE

J Nicholas AbrahamJosh AmmonsA. Gary BattenNathan BernsKurt BingemanBob BlackLinda BobroMatthew BradyDavid BrinkerhoffTeri BrinsonEvan BullMartha BuretzPhil BurkeMichael ByrneMary ByrneCraig CarpenterJoel Cavaness

Jeremy ChaseleyAndy ClarkJames ConroyNicholas CorteziTrent CoxChristopher CriseraScott CullerJohn CurryBarbara DawkinsDrew DeanMS DeCarloDon DeisingJeff DiefenbachDonna DoddJames DrinkwaterJohn FarreyIan Fike

Mimi FiskeThomas GarlandRichard GoblerHarvey GoldenbergRobert GreenebaumGary GrindleHarry HaldemanStuart HanflingSusan HendersonDawn HickmanKeith HinsonMarie HohenseeJason HolmesNicole HuckstorfMatt JarrettLorelei JohansenWendy JohnstonSteven KassAlan KaufmanDaniel Kaufman

Brady KelleyKathryn KerekesLawrence KesslerKeri KishMarie KovacikScott LaFaveLinda LeeDavid LeonardAnita LewisMichael LohbrunnerFrank LoweryMichael MaharajShawn MakowskiCarlton ManerJessica MarshallEmployees of

McClelland & HineMichelle McCoyPhillip McCrorieRobert McEwen

Benjamin McKayJonathan McKenzieJohn MeetzMark MelanderMartin MillerMichael MillerPatrick MillsJames MitchellDaniel MonninDavis MooreDaniel MuldowneyMatthew NicholsWilliam NicholsDavid OcasekAlison OliphantBobby OwensKiera PalmerLana ParksBarbara PayonkGlenn Petersen

Scott PurvianceChristopher ReynoldsLora RobbinsJames RoeJacqueline SchaendorfJimmy SchroederBrian SchwarzbachJanet ShemanskePaul SiposYiana StavrakisMarshall TurnerHester WeberKevin WestropePaige WilliamsChristine WilliamsonJohn WillseyD. Brady WilsonBrad WoodDavid WoodJohn F. Wood

Calvin WrightKelly YagerGarick ZillgittChristopher ZoidisNationwide Mutual

Insurance Co. PAC

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NAPSLO PAC contributions came from 123 individuals and ranged in amount from $25 to $5,000 in 2014.


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The Communications and Technology Committeemonitors positions on current industry technology issues, raises awareness and influences developmentof technology standards for the industry and members,and works with other industry organizations ontechnology initiatives impacting the industry. The committee also supports NAPSLO staff with communications initiatives as needed.


• Administered a Technology Survey to NAPSLO memberfirms regarding areas of technology interest and need. As aresult, a Technology Panel was offered at the 2014 NAPSLOAnnual Convention where approximately 25 attendeesheard industry experts discuss emerging technologies andrelated challenges in the surplus lines industry.

• Sponsored keynote address and assisted with programplanning at the 2014 AAMGA Automation & TechnologyConference in Orlando.

• Collaborated with other industry partners to fund the public relations and marketing efforts of the E&S JointWorking Group. The ESJWG is a volunteer alliance of industry organizations working to improve efficiencies.

• Advised NAPSLO staff on external communication andtechnology initiatives including the launch of a new Member Management Portal for online dues payment and collection of member demographics and developmentof NAPSLO’s wholesale value messaging campaign.

• Monitored development of industry technology standardsby monitoring and participating in quarterly E&S JointWorking Group calls, the ACORD Annual Conference, theAAMGA Automation & Technology Conference, the IIABAAgents Council for Technology Meeting and the ACORD Implementation Forum.

Davis Moore, Co-Chairworldwide Facilities, Inc.F. Marshall Turner, Co-ChairMaxum Indemnity CompanyStacy BrownFreberg Environmental, Inc.Craig CarpenterAll Risks, Ltd.Daniel DrennenEnvironmental Ins. ServicesDavid FinkelsteinCapitol InsuranceTim HoelleW.N. Tuscano Agency, Inc.Timothy HortonUSG Insurance Services, Inc.Jack KramerNortheast National BrokerageB. Scott LandryLane & Associates, Inc.Melissa MearsEverest National Insurance Co.Eddie RobinsonNautilus Insurance GroupRodney SmithLloyd's America, Inc.Blake StockThe Combined GroupEnid TurnerAmWINS BrokerageElaine WhiteS/L Stamping Office of Texas



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COMMUNICATIONS & TECHNOLOGy COMMITTEE

The Career Awareness & Internship Committee’s mission is to network NAPSLO members to create interest, awareness and enthusiasm about surpluslines and to attract bright, enthusiastic college studentsto the industry through NAPSLO’s internship program.


• Placed 14 interns in the 2014 NAPSLO Internship Program,hosted by 28 member firms. A mentor program was alsodeveloped to provide additional guidance and support tointerns throughout the program.

• Selected seven NAPSLO interns to attend the 2014 Annual Convention, and Kit Mohler and Bruce Thomaswere selected as the J.H. Blades and Bermuda Scholars, respectively.

• Promoted career opportunities in the industry through attending industry days, career fairs, conferences and classroom engagement. The Committee also coordinatedefforts with the Derek Hughes/NAPSLO Educational Foundation to reach 2,200 students through 41 speakingengagements, symposiums and career fairs.

• Grew NAPSLO’s Next Generation membership to 740, anincrease of 106 from the previous year. The Committee and Next Generation continued to more closely align NAPSLO’sNext Generation work with NAPSLO committees, ensuringthe Next Generation continues to engage in NAPSLO’s mission and work.

• NAPSLO and the Foundation sponsored and presented atthe Troy University Surplus Lines Symposium and reached90 students from 14 universities. Also sponsored and attended the Illinois State Surplus Lines Symposium where148 students from 17 universities participated in educa-tional sessions.

Scott Culler, Co-ChairMarkel, west RegionMike Miller, Co-ChairScottsdale InsuranceNick AbrahamMarkelSusan AltrockIAT SpecialtyKim AnthonyRisk Ins. Brokers of the WestFrank BaronZurichDavid BrinkerhoffR-T SpecialtyPaul BurgerWestrope Ins. Managers of FLJeff CaseHull & Co – StocktonTimothy ChaixR.E. Chaix & AssociatesTony ChimeraAxIS InsuranceDon ConfaloneMarkel, Northeast RegionLaura CorwinLiberty Surplus Insurance Corp.Dawn D’OnofrioWFKC Underwriting ManagersKaren DavisScottsdale Insurance CompanyTom DeCotisDeCotis Insurance Assoc., Inc.Jim DeSimoneWestern World Insurance GroupDavid DowAmWINS BrokerageKristin DowneyAmWINS BrokerageSarah GavlickMarkel, Northeast RegionVin GiordanoAtlantic Casualty Insurance Co.Katie KatzmanAmWINS BrokerageNeil KesslerCRC Insurance Services, Inc.

CAREER AwARENESS & INTERNSHIP COMMITTEE

Jeff LambMarkelStephanie LaurichS/L Stamping Office of TexasScott LoganAll Risks, Ltd. Donna LusignanBurns & Wilcox Ins. ServicesJeffrey LyngaasCapitol Insurance CompaniesJonathan M. McKenzieCommercial Sector Ins. Brokers

Jennifer MierAmWINS BrokerageCatherine MoranVela Insurance Services, LLCTerri MoranVela Insurance Services, LLCClint L. NokesRSUISusie ParksRPS ScottsdaleDarrell PippinSwiss Re Corporate SolutionsPatti RothxS Brokers Insurance AgencyBrian SloanGreat American Insurance Group

Christine SnowbergerGeneral StarVan N. SpanosGreat American Insurance Group

Carol StarkCNA Select RiskYiana StavrakisAmWINS BrokerageChad TrainorArlington/Roe & Co.Matt WillisNavigators Management Co. Michelle YukoAmWINS Brokerage




The Mid-Year Committee helps produce the Mid-YearLeadership Forum, which provides industry leadershipa platform for networking and an exchange of ideasin a relaxed setting.


• Hosted 606 delegates at the 2014 Mid-Year LeadershipForum in Scottsdale, AZ, an increase of 21 attendees over the prior year.

• Expanded the Brokers’ Lounge to provide attendees withmore meeting space.

• Presented a Leadership Session featuring two speakers.Eric Siegel, Ph.D. delivered valuable information about the power of predictive analytics and how it can be harnessed to deliver cost-effective returns on marketing investments. Attendees were also inspired by Erik Weihenmayer, the only blind person to have summited Mt. Everest, as he spoke about his life experiences andshared his perspective on leadership and its contagious nature.

Gilbert Hine, ChairMcClelland & Hine, Inc

Robert AbramsonBliss & Glennon

Margaretta CollerZurich

Randy DossCRC Insurance Services, Inc.

Charles FordLiberty International Underwriters

MID-yEAR COMMITTEE


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The Membership and Ethics Committee’s mission is to recommend new members to the Board of Directors. This includes recommendations for votingmembers: Wholesale Broker/Agent members, Company members and Underwriting Managermembers, as well as non-voting members: Associatemembers, Life members and Honorary members.


• Revised and published membership application and referenceforms to more clearly define the minimum criteria and datasubmission requirements. In addition, applications were formatted to allow electronic completion and submission.

• Supported the launch of a new online Member ManagementPortal to allow members to pay membership dues efficientlyonline and update firm profile information.

• Reviewed 53 new membership applications and approved 19wholesale brokers, 1 company, 3 underwriting managers and21 associates as new NAPSLO members.

Carlton Maner, ChairAxIS InsuranceLaura AllenRPS Fort LauderdaleSue BishopRPS New JerseyAndrew BownRFIB Group LimitedRobert CecconiSwiss Re Corporate SolutionsBrian DeGrawNSM Insurance GroupRoss DriscollNational E&S Insurance, Inc.Marsh DuncanColony Insurance CompanyDennis DunneTrigon, Inc.Gerald DupreTorus Specialty Insurance

CompanySteve FrankeScottsdale Insurance Company

MEMBERSHIP & ETHICS COMMITTEELindy GardnerAdmiral Insurance CompanyTimothy HochkeppelWestern World Insurance

GroupRobert ItzingerIFISRobert JonesGeneral StarJames KeatingtKgLen MikulskiAmerican Empire S/L Ins. Co.James RunyanZurichRick SforzoMaxum Indemnity CompanyJeff ShortPartners Specialty Group, LLCChris SiegelSouthern Ins. Underwriters, Inc.Whitney PomeroyCapSpecialty



underwriting authority in one ormore risk-bearing insurers forspecified classes of business indesignated geographic areas and the companies for whom itunderwrites would themselvesqualify for Company membership.Underwriting managers that meetall of the NAPSLO membershipcriteria other than those drivenby percentages can qualify for Associate membership.AssociateDefined as an individual, firm or organization that does not qualify for voting membership,but supplies services to voting

CompanyDefined as a risk-bearing insurer, incorporated or organized in any state in theU.S. or Canada, engaged inthe writing of insurance principally through wholesale broker/agents. Companiesthat meet all the NAPSLOmembership criteria otherthan those driven by percentages can qualify forAssociate membership.Underwriting ManagerDefined as a firm which derives its business fromwholesalers and has specific

wholesale Broker/AgentDefined as a sole proprietorship,partnership or corporation licensed in at least one jurisdic-tion within the U.S. or Canadaas a broker, agent or managinggeneral agent, which is engagedin an insurance business predominately as a wholesaler.Subsidiary or Affiliated FirmsFor the purpose of qualifyingfor this class of membership,any firm or organization musttransact over 50 percent of its insurance business withfirms other than any parent ofaffiliated firm or organization.

members and/or supports the wholesale excess/surplus lines system.LifeMembership is granted toeach Past President of the Association.HonoraryAn individual nominated and elected by the Board ofDirectors.

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Wholesale Broker 370Company 65Underwriting Manager 41Associate 217Branches 802Total Member Offices 1,495

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The Budget, Finance, Audit & Investments Committeeassists the Board in overseeing the Association’slong-term financial health and manages the budgetprocess, periodic financial reporting and the annualaudit. In addition, the Committee assists NAPSLO staffin managing Association assets and investments.


• The Financial Review Subcommittee reviewed NAPSLO’s financial statements on a monthly basis and worked withNAPSLO staff to address any questions or financial reporting issues that arose. The NAPSLO Board received a report on NAPSLO’s financial statements on a quarterlyand annual basis to include September 30, January 31, April 30 and July 31.

• The Investment Review Subcommittee assisted in the implementation of NAPSLO’s Investment Policy Statement(IPS), approved by the NAPSLO Board in September 2013.The Subcommittee reviewed monthly investment reportsfrom NAPSLO’s investment manager, Bradley, Foster & Sargent, to ensure compliance with the IPS and monitor investment performance in relation to portfolio benchmarks.

• The Committee met with the independent auditors fromMayer Hoffman McCann (MHM) and discussed results ofthe July 31, 2014 audit including an unqualified audit opinion, no material financial statement adjustments, andno material weaknesses in NAPSLO’s internal control structure. The final audit and correspondence regarding the audit and NAPSLO’s internal controls were presented to the Board of Directors and all NAPSLO members at the2014 Annual Convention.

David Leonard, ChairRSUI

Jessica BussRockhill

Troy FornofUSG Insurance Services, Inc.

Todd GrayOak Street Funding

Angela HigbeaAmWINS Brokerage

Kristi JeffersR-T Specialty, LLC

Catherine MausnerVela Insurance Services

Phillip McCrorieRSUI

Lee SjostromRSUI



BUDGET, F INANCE, AUDIT & INVESTMENTS COMMITTEE

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NAPSLO closed its 2014 fiscal year in a strong financial position.Revenue growth from attendance at the 2013 NAPSLO Annual Convention, 2014 Mid-Year Leadership Forum and NAPSLO Schoolswas invested in services and resources to enhance the value ofNAPSLO services to members, and continued to generate positivenet income for the Association.NAPSLO reported total revenues of $6.0 million, an increase of 11.9 percent from 2013, and expenses of $5.6 million, a 29.4 percent increase from 2013. NAPSLO ended fiscal year 2014 with$6.7 million in net assets, providing continued strength and stabilityin financial operations.Convention registration revenues increased significantly with 3,844members attending NAPSLO’s 2013 Annual Convention, along withgrowth in attendance at the 2014 Mid-Year Leadership Forum. With near 700 member firms, representing 1,500 member offices, membership dues, which renew in June of each year, remain steadyand the dues schedule has not increased in the past five years.Increases in 2014 spending also resulted from growth in attendanceat NAPSLO’s events during the year, along with growth in the numberof NAPSLO committee volunteers supporting the Association’s committee work.

NAPSLO FINANCIALS


The state of the Association is strong as evidenced by our financialresults in fiscal year 2014. During this year, the Board of Directorsleveraged the continued improvement in the Association’s financialposition to make strategic investments in NAPSLO services and resources to enhance the value of services to members. These investments ranged from launching the new Surplus Lines Professional Selling Skills School to launching NAPSLO’s new brandand reinventing the wholesale value messaging campaign, all ofwhich enhance the awareness and relevance of the surplus lines segment and its growing proportion of the insurance industry. TheAssociation’s strong financial position will support continued investment in valuable services to NAPSLO members in the areas of wholesale value messaging, regulatory and legislative advocacyand growing education and career development programs for NAPSLO members in the years to come.”NAPSLO’s financial statements were reviewed by independent auditors, Mayer Hoffman McCann P.C. Their report included an unqualified audit opinion, no material financial statement adjustments, and noted no material weaknesses in NAPSLO’s internal control structure.

N A P S LO BA L A N C E S H E E T N A P S LO I N CO M E STAT E M E N T

The Past Presidents Council provides counsel to the current NAPSLOPresident and Board of Directors on issues and assists with special projects as needed. Thirty-eight industry leaders have occupied the office of NAPSLO President since the Association’s inception in 1974,and a number of Past Presidents remain actively engaged in the industry and activities of the Association. This wealth of knowledge, experience and leadership is critically important and valuable to theNAPSLO Team, Officers and Board of Directors in ensuring the continuedsuccess of the organization and its membership services and operations.

kevin westrope, ChairRobert AngleKurt BingemanThomas BloomKevin BrooksJames BrysonMaureen CavistonJeremy CookeNicholas CorteziJohn CrowtherH. James GriffithDavid HartochLetha HeatonTapley JohnsonMarshall Kath

John LathamAnthony MarkelCharles McAlearWilliam NewtonMatthew NicholsRoy OddyTimothy PedersenRichard PolizziRobert SargentPaul SpringmanNeil StricklandJoseph TimmonsLawrence WessonGary WestphalenJohn Wood


PAST PRESIDENTS COUNCIL

NAPSLO STAFFVicky FlemingAdministrative Assistant/Registration Manager

Julienne FritzDirector of Operations

Susan HendersonDirector of Marketing & Communications

Debbie Hill, CMPDirector of Meetings & Conventions

Brady KelleyExecutive DirectorKeri Kish, J.D.Director of Government RelationsDenise MarshallExecutive AssistantJohn MeetzState Relations ManagerJustin MohnProject ManagerGreta Roberts Accounting & Membership Manager

PRESIDENTHank HaldemanThe Sullivan GroupLos Angeles, CA

OFFICERS

w H O L E S A L E B R O k E R D I R E C TO R S

V I C E P R E S I D E N TGilbert C. Hine, Jr.McClelland & Hine, Inc.San Antonio, Tx

S E C R E TA R YDavid E. LeonardRSUI Group, Inc.Atlanta, GA

T R E A S U R E RJames C. Drinkwater AmWINS BrokerageNew York, NY

PA S T P R E S I D E N TKevin T. WestropeDallas, Tx

Scott A. CullerMarkel, West RegionWoodland Hills, CA

C O M PA N y D I R E C TO R S

Carlton ManerAxIS InsuranceAlpharetta, GA

Michael D. MillerScottsdale Insurance Co.Scottsdale, AZ

F. Marshall Turner Maxum Indemnity Co.Alpharetta, GA

Joel D. Cavaness Risk Placement Services, Inc.Itasca, IL

Robert J. Greenebaum, Jr.Swett & CrawfordChicago, IL

Harry L. Johnson IIJohnson & Johnson Inc.Charleston, SC

Davis D. MooreWorldwide Facilities,Inc.Los Angeles, CA

Lana S. ParksThe Parks GroupArlington, TxJacqueline M. Schaendorf

Insurance House, Inc.Atlanta, GA

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© 2015 National Association of Professional Surplus Lines Offices, Ltd.

National Association of Professional Surplus LinesOffices, Ltd.

4131 N. Mulberry DriveSte. 200Kansas City, MO 64116816.741.3910www.napslo.org

Documents

NAPSLO 2014 Annual Report...NAPSLO SQRU ANNUAL REPORT T •Sponsored 2014 A.M. Best SpecialReport-U.S. Surplus Lines Market Review, including a SQ-year retro - spective since the report