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ROCKFORD MUTUAL INSURANCE COMPANY

THE COURIER

www.rockfordmutual.com September, 2011

The second quarter was unlike the first, and possibly any other quarter in our history! The second quarter

storms didn’t spare many parts of the country, particularly in the Midwest and Deep South! And yes, we had

our share of claims!

Numbers for the industry will be high – higher than any of us expected coming out of a solid first quarter.

For each one of these storms, and more importantly, for each person affected, we have an opportunity to re-

spond. We are in business to make up for the economic devastation that our insured’s are affected by. We are

in business TO PUT LIVES BACK TOGETHER!

Every associate at Rockford Mutual is doing their part to pay what is owed as quickly as possible and to con-

tinue writing above average business.

Fortunately, Rockford Mutual Insurance Company is in a strong position to handle these storms and the claims

that result. Our surplus position is strong and we have a vision for the future!

As I write this, we await word from our elected officials in Washington whether our country will default on the

promises we made. It is a sad time to see people putting self interest before doing the right thing. We at Rock-

ford Mutual take our promises seriously. We cannot control the weather, but we can control what we do and

how we do it. It is because of the strong relationships we have with our partner agents and Farm Mutual’s that

we are in a position to fulfill our promises.

As you will hear from me frequently, take what you do seriously. When the wind blows, rise to the occasion

and help PUT LIVES BACK TOGETHER! Whether it is a major storm, a fire loss or a car accident, it is just as im-

portant to your insured that you are in their corner helping them.

Although the results for the first half of the year were less than expected, we still have six months to continue

to grow profitably and end the year with respectable numbers.

Joseph P. DeChatelets

President/CEO

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Let us help you with some of our preferred classes of business:

-Bars & Taverns -Christmas Tree Farms

-Clubs (Eagles, Chamber of Commerce) -Commercial Auto (Mono-Line)

-Day Care Centers (children & adults) -Dental Assistants (Professional)

-Detectives -Exercise & Fitness Centers -Fishing & Hunting Guide -Homeowner Associations

-Hunting Preserves (land owners leasing land) -Liquor Liability (several markets)

-Martial Arts Centers -Message Therapists (GL & Professional) -MOTORCYCLES, ATV’S, Snowmobiles

-Nurse’s Professional Liability (LPN’s, RN’s, many more) -Orchards

-Professional Liability (many classes) -Restaurants -Senior Centers

-Umbrella’s (both personal & commercial) -Vacant Property (personal & commercial)

SPECIALTIES: -Directors & Officers Coverage

-Condo Associations -Churches -Libraries

-Various Non-Profit groups

-Mono Line Workers Comp -Illinois -Indiana -Missouri -Wisconsin

Give us a call or e-mail us about your risk.

Susan Leoni: Ext 267 Nicole Hamilton: Ext. 292 sleoni@rockfordmutual.com nhamilton@rockfordmutual.com

ROCKFORD INSURANCE AGENCY, INC.

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DALE CARNEGIE GRADUATES

Pictured here are the thirty-seven RMIC employees who recently graduated from the Dale Carnegie course. The Dale Carnegie Course empowers people to handle today's tough business environ-ment. Participants learn how to strengthen interpersonal relations, manage stress, and han-dle fast-changing workplace conditions. They're better able to perform as persuasive commu-nicators, creative problem-solvers and focused leaders. Congratulations to the following graduates: Adrianne Sessions, Angie Mader, Barb Ridley, Barbara Warner, Brad Smith, Brandi Ducharme, Cathy Burhenn, Dan Slouka, Dan Yesbeck, Dannette Moorman, Deb Bridges, Deb Fleming, Debbie Beyer, Diana Davis, Dina Johnson, Dyan Lofgren, Fred Schneiderman, Greg Guilliams, Jill Pearson, Jim Lillard, Jim Sadler, Jua-nita Shelton, Kari McCue, Kathy LaCapra, Kathy Quast, Ken Chase, Kirk Newton, Linda Jacobsen, Lisa Adams, Luke Anderson, Malcolm Rowland, Rick Terrones, Roger Bendorf, Sandy Moore, Shane Heeren, Sue LaVine and Susan Leoni. So many took the course that we had to break them up into two normal size classes. Each class chose their recipient of the “Highest Award for Achievement”. This goes to the one par-ticipant who, in the opinion of all the others, best exemplifies the standards, qualities, and principles on which this program is based. This is the most prestigious award in the program, a tradition begun in 1912 and continued to this day." Recipients of this award were: for the Wednesday class, Juanita Shelton; and for the Thurs-day class, Malcolm Rowland. We congratulate all of the graduates and the award winners.

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♦ Fall Weddings

♦ Haunted Houses

♦ Corn Mazes

♦ Pumpkin Patches

♦ Fall Festivals

♦ Halloween Parties

♦ Concerts

♦ Craft Fairs

♦ Parades

ROCKFORD INSURANCE AGENCY

SEASONAL SPECIALTIES

Call Susan at Call Susan at Call Susan at Call Susan at extension 267 for a prompt extension 267 for a prompt extension 267 for a prompt extension 267 for a prompt quote or equote or equote or equote or e----mail her atmail her atmail her atmail her at

sleoni@rockfordmutual.comsleoni@rockfordmutual.comsleoni@rockfordmutual.comsleoni@rockfordmutual.com

News from Rockford Mutual Insurance IT DepartmentNews from Rockford Mutual Insurance IT DepartmentNews from Rockford Mutual Insurance IT DepartmentNews from Rockford Mutual Insurance IT Department. . . . . .. .. .. .

Want to get down? …………….. Were moving forward with

download availability for sub-producers!

We have great news for producers and sub-producers! We are now certified to do management system downloads for a variety of management systems. This will apply only to auto, home, and umbrella. Producers can choose to have either all or none of their sub-producers included in download. Sub-producers can now arrange to have their personal lines policies downloaded into their management systems starting immediately. Coming soon from the IT department...commission data download! In order to get set up for downloads, please contact Diana Davis at 800-747-2957 ext 258.

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Looking for Additional ways to spend your RMIC Co-op dollars? If you are a member of the Independ-ent Insurance Agents of Illinois (IIA) and you are a Trusted Choice member, The IIA is putting together a fall advertising campaign. Details for this program can be found at www.iiaofillinois.org on the homepage under “Trusted Choice”. Click on “IIA of IL launches statewide advertising campaign this fall”.

The same qualifications apply to this program where we must review any advertisement prior to ap-

proval. We must have our name and Logo shown on anything visual along with your agency. If you

have other carriers listed other than RMIC on your advertisement we will split our share of the 50%

co-op with the other carriers and you will still be responsible for the other 50%. If this program starts

prior to September 30th 2011, you will still be eligible for 75% reimbursement as long as we are the only

company with your agency in the advertisement. The percent of reimbursement is paid up to the total

amount allotted to you through the RMIC co-op program.

Co-op Advertising with Rockford Mutual

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Join Rockford Mutual Insurance Company and Inspire a Nation Business Mentoring for a free overview webinar on the upcoming September 9th, 2011 live workshop sponsored by Rockford Mutual Insurance Company. This webinar will overview the live workshop and help you understand why you should attend. Listed below are the dates and times for the webinars. Do you want to know what the top agents and agencies in the country are doing to make their amazing numbers? This workshop will not only introduce you to their best practices, but teach you how to set up similar processes and programs in your agency. The Live workshop will be held on Friday, September 9th, 2011 from 8:30 a.m. to 5:00 p.m. at DoubleTree Hotel, 10 Brickyard Drive, Bloomington, IL. At the workshop, we ask that you bring your laptops and your staff and let us teach you how to properly set up and implement the processes and tools that you need to take your agency to the next level. Featured Presenter, Billy R. Williams, Ph.D., - He is the President of Inspire a Nation Business Mentoring Services. www.inspireanation.com. This membership-based mentoring company helps 100’s of agents a year to grow their agencies. Billy is also President of Williams Family Agency, Inc. The group currently has 23 partner agencies around the country and produces $400 Million in production, annually. He is an expert at helping insurance agents and agencies double or triple their current production using no cost conversations and processes, low cost, efficient, marketing and advertising platforms, along with the latest marketing technology. This is a FREE workshop for all Rockford Mutual Insurance Company registered Agents and their staff.

To Join the Webinar:

1. At the times below, click the corresponding link to join each Webinar:

Wed., August 31, 2011 12:00 PM - 1:00 PM CDT https://www2.gotomeeting.com/join/410235811/106193512

Webinar ID: 410-235-811

Friday, September 2, 2011 12:00 PM - 1:00 PM CDT https://www2.gotomeeting.com/join/697142795/106923263

Webinar ID: 697-142-795

These links should not be shared with others; they are unique to you.

2. Choose one of the following audio options:

TO USE YOUR COMPUTER'S AUDIO: When the Webinar begins, you will be connected to audio using your

computer's microphone and speakers (VOIP). A headset is recommended.

-- OR --

TO USE YOUR TELEPHONE: If you prefer to use your phone, you must select "Use Telephone" after

joining the Webinar and call in using the numbers below.

Toll: +1 (805) 309-0022

Access Code: 286-968-266 Audio PIN: Shown after joining the Webinar

The registration website for the September 9th, 2011. workshop is: http://www.rockfordmutualworkshopbloom.ettend.com/

FREE WORKSHOP OVERVIEW WEBINAR— HOW TO QUICKLY DOUBLE SALES IN YOUR INSURANCE AGENCY

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Commercial Liability Coverage – Classification and Premium Audit

Liability premiums for commercial policies are calculated using elements that relate to the ac-tual operation to be covered. In some cases, this is based upon total square footage for “lessors risk only” properties; in others it is based upon number of units for apartments and condos and others are rated based upon gross sales or payroll.

Our focus in this article is on the latter; those risks that are rated based upon the gross sales or payroll. The premium charges for risks based upon these figures are “estimates” provided by the insured that anticipate what their results will be for the upcoming year. Therefore, it is very important that these fig-ures are accurate representations of their intended exposures. This is not an exact science, but should be an “educated guess” to take into consideration many elements that will impact their business results. If payroll or gross sales is underestimated or a wrong classification code is used, additional premium will be due to Rockford Mutual Insurance Company when the premium audit is completed. In order to avoid these uncomfortable situations, the following tips are offered:

♦ Ask the prospect/insured for a complete list of all business operations for the past three years and their last 10 jobs/projects. This will serve as the basis for determining what type of work they have done and what they plan to do in the upcoming year. Class codes should be selected based upon:

• CONPAC/ROPAC – If the prospect/insured does work that applies to more than one

classification, determine which one has the highest rate. The payroll or gross sales should be applied to that classification. We do not allow these figures to be “split” among classes, and it is standard industry practice to pick the highest rated class. If less than 20% of their operations are in the highest rated class, speak to your un-derwriter for guidance.

• Commercial Package Policy – If the prospect/insured does work that applies to more than one classification, then you should list all the classes that apply and the premium will be applied accordingly. However; if the only worker is the owner, we cannot split the payroll between classes for one person.

♦ If you are unsure about the figures that you were given, ask your Underwriter to conduct a loss control survey to confirm operations and number of employees. It’s in your own best interests to make sure you know what you are covering as the agent and in turn want to protect your profit-ability results.

♦ Ask the prospect/insured if they plan to expand in the upcoming year. If so, then make sure the payrolls or gross sales are selected to reflect this increase in operations. Likewise, reductions in operations should result in lower estimates as well. This will help to avoid large premium adjust-ments at audit time.

♦ Touch base with the insured 4-6 months into the policy term to see how their year is progress-ing. Use this opportunity to ask if they want to adjust payroll or gross sales at this time to elimi-nate large premium adjustments. This will allow them to “cash flow” the change through the re-maining months, rather that needing to pay a lump sum at audit time.

All of these items will help to eliminate “surprises” at the end of the policy term and also should help to improve retention rates in your agency. If an insured knows you are watching out for their bottom line throughout the year, they will be more likely to stay with RMIC and your agency for many years to

come.

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We are excited to invite you to be our guest at one of our two agency incentive trip locations. The Chula Vista Resort in the Wisconsin Dells offers activities for everyone. For the families, there is the outdoor water park which includes the Cyclone waterslide and lazy river or the 80,000 square foot Lost Rios Indoor water park. For the adults, you can enjoy the Cold Water Canyon 18 hole golf course or pamper yourself at the Spa del Sol. The Chula Vista sits next to the Wisconsin River and offers a spectacular view. Many other activities are within minutes of the resort. Our other location is the Four Seasons Resort at The Lake of the Ozarks, Missouri. This re-sort is located on the Lake of the Ozarks and offers many amenities such as; three 18 hole golf courses, lake activities, the Spa Shiki, eight different dining areas, and many activities within minutes of the resort. This resort is fun for the whole family or can be your adult getaway. These trips include 4 night accommodations, cocktail reception, a closing dinner, and children under 18 years of age are included free in the same room. Transportation is not included.

⇒ Qualification Period: April 1, 2011 – June 30, 2012 – New business ⇒ Travel Dates; Lake of the Ozarks August 1st—5th. 2012 and Chula Vista Wisconsin

Dells August 8th—12th, 2012. ⇒ Eligibility: Only agents and spouse (or friend) or agency employees and spouse

(or friend) are eligible to participate. Must be active RMIC agency at the time of trip. If your agency qualifies enough points, you may take children of the travel-ing couple otherwise, point buy-ins are shown below.

⇒ 300 points required to qualify (per couple). Additional 75 points per child if they are 18 and older or they require an additional room.

⇒ Qualifying points are awarded for all new applications with effective dates of April 1, 2011 thru June 30, 2012 (excluding applications cancelled for underwriting reasons) for Personal Auto, Homeowner, Commercial Auto, ROPAC, CONPAC, CPP, and Worker’s Compensation. Applications must be received by July 3, 2012. Additional points will be awarded or deducted based on net policy growth or loss for the above mentioned lines of business in this time period.

⇒ Agency may buy-in on a pro-rated basis if a minimum of 150 points have been earned. ⇒ Additional buy-in requirement if RMIC loss ratio exceeds 50%. Loss ratio based on the

15 month contest period of April 1, 2011-June 30, 2012. ⇒ (Note – see next page for buy-in requirements). ⇒ Limited to four couples per agency. (Unless your agency’s written premium gain

exceeds $175,000 and the 15 month loss ratio is 40% or less. If this occurs, then the agency can qualify up to two additional trips based on our point qualification and $20,000 worth of additional premium per couple). (Example: If agency’s loss ratio is 40% or less, the agency has total written premium growth of $195,000 and the total points earned are 1500, then the agency qualifies for 5 trips.)

2011-2012 Sales Incentive Program

FOUR SEASONS RESORT LAKE OZARK, MO

CHULA VISTA RESORT WISCONSIN DELLS, WI

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A Day at the Ballpark

Instead of our annual company golf outing, we attended a St. Louis Cardinal game this year in St. Louis on

August 24th. Fun was had by all 48 in attendance. Everyone battled the heat as temperatures reached 99

degrees at the ballpark. Unfortunately for the Cardinal fans, their Cardinals could not overcome a 6 run deficit

and lost to the Los Angeles Dodgers 9 to 3. Regardless of the score, it was a beautiful day for a game and

everyone had a great time together.

The following notice was obtained from the EPA website regarding a recent ban on the herbicide, Imprelis.

Gardeners and landscape professionals need to take note: Imprelis, an herbicide marketed to control weeds that has been reported to be harming a large number of trees has been banned by the U.S. Environmental Protection Agency. The EPA ordered E.I. DuPont de Nemours (DuPont) to immediately halt the sale, use or distribution of the herbicide. On Au-gust 4, 2011, DuPont voluntarily suspended sales of Imprelis and announced that it will soon conduct a product return and refund program. This ban followed an EPA investigation into why a large number of evergreens such as Norway spruce and white pine and other trees have been harmed following the use of the herbicide. The EPA has looked at whether these incidents are the re-sult of product misuse, inadequate warnings and use directions on the product’s label, persistence in soil and plant material, uptake of the product through the root systems and absorbed into the plant tissue, environmental factors, potential runoff is-sues or other possible causes. On June 17, 2011, DuPont issued a letter to professional applicators cautioning against the use of Imprelis where Norway spruce or white pine trees are present on, or in close proximity to, the property being treated. On July 27, 2011, DuPont ac-knowledged to the EPA that there has been damage to trees associated with Imprelis use and the company had developed an internet web page to provide information and updates concerning Imprelis use. http://www2.dupont.com/Professional_Products/en_US/Products_and_Services/Imprelis/index.html

Lawn Care Services; Landscapers and golf courses are the classes of business that may be impacted by use of this herbicide. Please make your insured’s that fall into these business classes aware of this notice. Rockford Mutual Insurance Company will not be imposing moratoriums on new business submissions that fall into these classifications. However; you should ask your clients to determine if they have used this herbicide in the past. If so, they should stop doing so immedi-ately and disclose this information when submitting new applications. Any questions on this matter should be directed towards your Rockford Mutual Insurance Company commercial lines underwriter.

Landscaping & Lawn Care Contractors Notice – Imprelis Herbicide

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Commercial Auto New Business 9/1/2011

Renewal Business 11/1/2011 (Illinois, Indiana, Missouri) New & Renewal Business 11/1/2011 (Wisconsin)

We have reviewed our current business and will be implementing a moderate rate increase for new and renewal business.

This rate change will vary by customer, and will include a significant decrease on private passenger type vehicles.

The following items were updated:

1. Revised Base Rates

2. Revised Secondary Class Factors

3. Revised Insurance Score Relativities

4. New Multi-Policy Discount -5%

♦ Will not be automatically applied at renewal. Please contact your underwriter if you have a

multi-policy exposure with RMIC and would like the discount applied.

5. Hired Auto Physical Damage

Manuals:

We will not be distributing hard copies of our updated manual with this notice. Please visit our website at

www.rockfordmutual.com for an updated copy of our manual or you can acquire a hard copy by contacting our

Supply Department at extension 331.

ROCKFORD MUTUAL HOLIDAY SCHEDULEROCKFORD MUTUAL HOLIDAY SCHEDULEROCKFORD MUTUAL HOLIDAY SCHEDULEROCKFORD MUTUAL HOLIDAY SCHEDULE

Monday, September 5 ~ Closed for Labor Day

Monday, October 10 ~ Closed for Columbus Day

Thursday, November 25 & Friday, November 25 ~ Closed for Thanksgiving

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Insurers and reinsurers will not be impacted by Standard & Poor’s U.S. sovereign rating downgrade, says the president of the Insurance Information Institute (I.I.I.).

I.I.I.’s Robert Hartwig cites three reasons for the lack of impact on insurers:

• First, the National Association of Insurance Commissioners (NAIC) issued a statement saying there would be no impact on insurers’ investments and that risk-based capital and asset valuation reserves would be unaffected. Hart-wig says that means insurers do not have to worry about putting up more cash for reserves.

• Second, U.S. Treasury accounts for 6 percent of invested assets, making it a minor position in the overall financial picture for insurers.

• Third, the downgrade has no impact on the solvency of insurers’ liquidity and their claims-paying ability.

Hartwig says Friday’s action by S&P to downgrade the U.S. sovereign rating by one notch from “AAA” to “AA+” is “trivial” compared to the market disruptions three years ago, and he adds that Treasury bonds still remain the “safest security in the world” for investors.

In its statement, the NAIC says it sees no current impact on insurers’ capital, but it would “consider changes to our regu-latory treatment if it becomes necessary in the future.”

Reinsurance broker Guy Carpenter issued a report saying it also sees no impact on the P&C industry. Guy Carpenter illustrates the point by noting that in an S&P European model where the rating dropped to “AA-,” capital charges moved upward by about 0.3 points. Guy Carpenter did say that if the downgrade further weakens the U.S. dollar, foreign companies could look to target U.S. carriers for acquisition.

Financial analysts were not pushing the panic button on their evaluation of the P&C industry.

Sandler O’Neil Research says in a note says that the “impact on the insurance industry is reasonably modest.” The big-gest impact would be on carriers’ portfolios that hold U.S. government debt.

UBS’ Brian Meredith says insurers view the downgrade as a “business risk.” The extent of action by carriers would be to reduce “their exposure to government and government agency securities within their fixed-income portfolios.”

Today, Moody’s reaffirmed its “AAA” rating of the U.S. credit strength rating, saying that further measures to control the U.S. debt are necessary.

The rating service says downgrade could be triggered before 2013 if the federal government fails to agree on a plan that keeps the federal debt to GDP from peaking “not far above the projected 2012 levels of near 75 percent by the middle of the decade and then declining over the longer term.”

This morning, S&P held a conference call discussing its decision.

Analysts David Beers and John Chambers emphasize that the reason for the downgrade decision was the political inabil-ity of U.S. leaders to take the initiative and find a solution to the debt problem.

The United States rating could return to “AAA” status when there is broader fiscal consensus and a “robust” fiscal pack-age agreed upon in Washington.

The analysts made a point of noting that no country with an “A” rating has ever defaulted on their investment grade bonds.

Standard & Poor’s U.S. Sovereign Rating Downgrade

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WELCOME, NEW EMPLOYEES . . . . . WELCOME, NEW EMPLOYEES . . . . . WELCOME, NEW EMPLOYEES . . . . . WELCOME, NEW EMPLOYEES . . . . .

Dorinda Williams

Joshua Joyce

Anthony Harvey

Anthony Harvey is the newest member of the IT team as an Operator and Hardware Specialist. Anthony was hired on June 27 following a career as print buyer for Kable Printing, Mt. Morris, IL. He has certified in Network + and Microsoft Windows 7. Anthony and his wife, Jessie are proud parents of Lau-ren and Preston. In his time away from RMIC, Anthony likes travel, golf, tennis, gardening, and photography. He has only 4 states left to visit in the United States – Alaska, Hawaii, Maine, and New Hampshire.

Dorinda Williams, Senior Claims Representative, comes to RMIC from Allstate Insurance Company and Go America, formerly American Ambassador Auto In-surance. Dorinda earned an Associate of Arts Degree from Elgin Community College and a Bachelors Degree in Accounting from Ashford University. Dorinda and her significant other, Terrence Woods, have two children, Deonté Williams and Tramarion Wil-liams. Dorinda enjoys reading, swimming, and spending time with her family. She is currently serving with the Na-tional Guard as a 68W (Combat Medic) and just re-turned from a one year tour in Egypt.

Joshua Joyce, Senior Claims Representative, joined RMIC on August 1, 2011 following employment at Allstate Insurance as a Property Adjuster on the Cat Team. Josh is a graduate of Northern Illinois University with a degree in corporate communications. Joshua and his fiancée, Nicole, are planning a June, 2012 wedding. Josh spends his free time golfing, cooking, scuba diving and working on his new house.

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And more new employees . . . . . And more new employees . . . . . And more new employees . . . . . And more new employees . . . . .

Kelly McCullum

Jerry Long

Donna Murphy

Kelly McCullum, Auto Estimating Analyst, joined RMIC on July 6, 2011 after a 22 year career in fastener sales with Elco Construction Products and Brynolf Manu-facturing. Kelly is currently attending Cardinal Stritch Uni-versity with a major in business management. Kelly is the proud mom to Kaila and Jacob and is a gradu-ate of Boylan Catholic High School. In her spare time, Kelly enjoys karaoke, reading and travel.

Jerry Long, Marketing Representative, began his ca-reer with RMIC in June, 2011 after a lengthy employment as a branch manager for Illinois, Indiana, & Wisconsin with Cunningham-Lindsey, independent adjusters. Jerry will be the marketing rep for the southern Chicagoland and north-ern Indiana territories. Jerry and his wife, Patti, are proud parents of Nikki and Brad and equally proud grandparents of Liam, 4, and Noah, 18 months. When Jerry is away from RMIC, he officiates at high school baseball and basketball games. He also like hiking and biking.

Donna Murphy, Marketing Representative, was hired on 6-28-11 for the Northeastern Illinois, Southeastern Wis-consin territories. Donna come to us from CNA and is a graduate of Alverno College, Milwaukee, WI and Hamilton High School. Donna and her husband, Michael, have one adult daughter, Laura. They enjoy outdoor activities, i.e. golf, walking, bik-ing, etc.