Building On The Work Of Predecessors, Newton Prepares To Lead NAPSLO

"I would like to ensure the legacy of my company. One way to do so was by selling to an operation like RPS," he said.

He explained that the buyer not only has a long history of allowing its partners to operate as they did prior to the sale, but also–"and this is really what ensures the legacy of the company–they have excellent programs to bring young people into the industry," he said.

Mr. Newton described Gallagher's summer internship program for college students–many of whom they hire upon graduation. Once on board at RPS, the new hires go through a very structured two-year training program, he said–adding that the "enormous educational capabilities" of the Gallagher organization include home-office training and online programs.

After training them for two years, they turn them into brokers. "That's not something I could have done. I don't have the resources to do that on my own," he said–acknowledging, however, that the decision to sell was personally difficult.

"I haven't had a boss in 22 years," he said.

As boss of NAPSLO for the next 12 months, Mr. Newton lists two goals high on his agenda–both related to activities in the nation's capital.

First, noting NAPSLO's support of the Nonadmitted and Reinsurance Reform Act–a bill passed by the House Financial Services committee that streamlines the surplus lines regulation and taxation–he said a key goal during the next year is to move the bill forward.

"It sort of died there" in the House committee, he said, noting that NAPSLO will work to "get something similar to it in the Senate."

Mr. Newton, explaining the reasons for NAPSLO's support of the measure, described the "astronomical amount of time and expense" that members spend on surplus lines filings. "Years ago it was easy. You wrote an account. Accounts did not tend to be as national in scope. So you made a filing in one state," and that was it.

Now, a retail clothing operation in Los Angeles could very well have stores in 50 states. "If so, we have to make filings in 50 states [and] the states don't all agree on how all the filings should be made."

"Each state expects us to be aware of its surplus lines laws, [but] no one can be aware of all the nuances of laws and regulations in 50 different states," he said. "When you think of it in that fashion, you start to get a sense of the enormous problem this is."

Mr. Newton said another important goal for his upcoming term as association president is to quadruple the size of funding for NAPSLO's PAC. The PAC was started earlier this year to support candidates whose platforms are consistent with NAPSLO's legislative goals, and according to NAPSLO $45,500 has been raised to date.

"Up to this point, the PAC has been primarily funded by board members," Mr. Newton said, adding that it needs to jump to "a couple of hundred thousand dollars." So an item high on his agenda is figuring out how to raise the money. "How are we going to convince members, frankly, to dig into their pockets?" he said.

Members ask: "What can we do about the surplus lines filing issue?" he reported. "This is one thing they can do."

Mr. Newton said he's not disappointed in the level of contributions so far. "It just started," he said, adding that the rules for soliciting contributions are complex.

"You can't just send an e-mail that says, 'please give us money.' So it's taking time to understand the rules, and then come up with a game plan," he explained, noting that NAPSLO will be engaged for the next few months in figuring out the rules to ensure activities are consistent with election laws.

Mr. Newton also spoke about the need to provide more support to the NAPSLO staff.

"If you only think back seven years, we had 2,100 registrants" to the annual convention. "This year, we will be close to 3,500. Yet we somehow managed to keep the same Kansas City staff to handle this."

"That is unbelievable," he said. "They're not just processing 50 percent more registrations, but they've got 50 percent more phone calls coming from people with requests for room changes or meeting rooms–50 percent more problems. Yet the staff handles it with an amazing amount of grace and good humor."

Still, "we're outstripping their ability to be able to handle this large an event," he concluded, noting that other activities, such as the schools and communications efforts, are also expanding. To manage all that, the organization in Kansas City must grow. "That's going to require funding, also."

Mr. Newton, reviewing his history with NAPSLO, said he became involved with committee work in the early 1990s and has been on the board since 1999. Among his favorite NAPSLO activities was chairing the internship committee, he recalled.

Impressed by the caliber of interns he has spent time with at annual conventions, he said, "It makes you feel good about the future of our world. And I really feel like I'm making a contribution to the future of our business" by participating in an activity that introduces students to surplus lines, he added.

Mr. Newton himself started in the insurance business in 1970, underwriting national accounts in the New York City office of Hartford Insurance after going through a training program. Then, after a stint as a reinsurance intermediary, he got into the wholesale business in Los Angeles in 1976.

Asked what intrigued him about the surplus lines segment back then, he said, "It was the constant hustle and flow of business. There was something new on my desk every day."

"There are so many opportunities to write business, not only because there is such a huge economy in Southern California, but also because there are so many insurance brokers in the state–all of whom are potential clients," he continued.

"The surplus lines business is the most exciting end of the insurance business…We're not guided by manuals. So there is the ability to be creative–to be a deal maker–and there's so much potential for personal growth. The more energy and work you put into it, the further you can go," said Mr. Newton, who has built a diversified wholesale brokerage with specialists in residential construction, property, directors and officers, employment practices liability, professional liability, and environmental coverages.