Chair perspectivesLessons for students of the financial crisisTimes are interesting for all students of the U.S. financial system. Since the spring and fall of 2008, you get the sense that significant financial history is happening. What should our current finance, insurance and law students be taking away as events unfold? Are there lessons that will help our students deal with present and future financial turmoil?

While debate continues on the causes of the financial crisis, a dynamic, changing society makes the causes of the crisis less important than the les-sons learned. I offer my observations on two things that students of the financial crisis can learn from the extraordinary events of the past 18 months.

First, it seems clear that our system of financial markets is not immune to behavioral “blind spots.” These blind spots affect investors, financial advi-sors, corporate leaders, and regulators–sometimes simultaneously. The incorrect assessment and mismanagement of risk relative to expected returns can be as catching as the flu; the crowd can be dangerous and dramatically wrong. Sensitivity to risk varies over time and participants can be caught in the illusions of liquidity and precise information. These blind spots put a premium on thinking critically about financial decisions and economic condi-tions. As instructors, we build critical thinking into the curriculum to develop these skills, but students need to be aware of the importance of wondering why, for example, investors at times demand so little compensation for risk.

Second, debate about the value of markets free from direct government/taxpayer intervention raises significant questions for students of the financial crisis, not clear solutions. The questions alone merit open discussion in class. Students must come to realize that nothing is cast in concrete in a dynamic system except a few enduring truths. One truth is the law of unintended consequences, which is evidenced both by Adam Smith’s invisible hand of competition and by a government mandate (circa 2000) to increase mortgage lending by Freddie and Fannie, as examples.

Another truth is that correct decision-making incentives imply “skin in the game.” The financial crisis is very much about the loss of trust and cred-ibility between financial market firms; incentives can get no better than acting through a position of ownership.

A last truth is that private enterprise is good for human progress. Com-pared to the alternatives, a free-market economy is best at generating income and growth, creating wealth and raising productivity. Public policy decisions that fail to reflect these enduring truths risk harming the financial system.

If you have other financial crisis lessons our students should learn, share them with me. The perspectives of our alums and friends matter and can help our students succeed in an ever-changing economy.

Warm regards,Gary D. Koppenhaver, Chair and Professor

SUMMER 2008

ContactsDepartment of Finance, Insurance and Law chairpersonGary Koppenhaver(309) 438-8777gkoppen@ilstu.edu

Internship coordinatorsKim Small for finance majors(309) 438-2928khsmall@ilstu.edu

Debbie Babcock for insurance majors(309) 438-3368dababco@ilstu.edu

Undergraduate academic advisorNancy Baldoni(309) 438-8385nlbaldo@ilstu.edu

Financial Management Association faculty advisorsKeldon Bauer(309) 438-7991kjbaue2@ilstu.edu

Linda Miles(309) 438-2448llmiles@ilstu.edu

Joseph Trefzger(309) 438-2966jwtrefz@ilstu.edu

Student presidentCollin Geninatticmgenin@ilstu.edu

Gamma Iota Sigmafaculty advisorsDebbie Babcock(309) 438-3368dababco@ilstu.edu

Yu-Luen Ma(309) 438-7081yma@ilstu.edu

Student presidentJeremy Gallicojagalli@ilstu.edu

a newsletter of the Department of Finance,

Insurance and Law

Gary Koppenhaver

Summer 2009

New financial planning minor for guarding the nest eggIn March 2009, Illinois State University approved the offering of a minor degree program in financial planning by the faculty of the Department of Finance, Insur-ance and Law starting in the fall 2009 semester. Requirements for the financial planning minor include coursework in finance (investments, retirement plan-ning), insurance, law (estate planning), accounting (personal income taxation), and marketing (personal selling). The purpose of the minor is to prepare students for the certified financial planner designation. Members of the Department of Fi-nance, Insurance and Law Advisory Board and the Educational Investment Fund Board of Directors have long endorsed the minor. The minor places the depart-ment squarely on the side of financial advisors acting under fiduciary duty or the obligation to put their client’s interest first rather than the suitability standard for clients of brokers and other securities salespeople.

Gamma Iota Sigma updateGamma Iota Sigma, a professional coed fraternity for students inter-ested in insurance, experienced a landmark year. The fall semester featured golf lessons, Redbird tailgating, and participation in in-dustry events such as the Alumni Golf Outing, RIMS Luncheons, and the 2008 REBEX Conference, among other events. The fall also featured a new week of activity celebrating the chapter’s 17th birthday. The spring semester included participation in Redbird Basketball, local volunteering, and professional development events such as the NAPSLO Symposium, 2009 RIMS Conference, and industry speakers. The fraternity also hosted the first annual Gamma Games, bringing over 20 industry professionals and alumni to campus to network in a carnival style atmosphere. A full listing of events is available at katieschool.org or by contacting the new president, Jeremy Gallico at jagalli@ilstu.edu.

Kubitz and Vaughn early career achievement awardeesAlan Kubitz ’94 and Aaron Vaughn ’95 received College of Business Early Career Achievement Awards on Illinois State’s Homecoming weekend, October 2008. The award recognizes outstanding young alumni who have demonstrated professional leadership and the potential for future distinction in their careers. Kubitz is direc-tor of risk management at The HAVI Group LP. His current responsibilities en-compass managing a variety of risks and integrating enterprise risk management practices into the business culture. Kubitz is active in the insurance community and serves as the current president of the Chicago chapter of the Risk and Insur-ance Management Society. Vaughn is a senior research analyst with Edward Jones & Company, making investment recommendations within the health care sector for the firm’s financial advisors and clients. Vaughn also worked as an analyst for Robert W. Baird & Company, State Farm Insurance, and First of America Bank. Vaughn is a chartered financial analyst, certified public accountant, and chairman of FIL’s educational investment fund board of directors.

a newsletter of the Department of Finance, Insurance and Law

Summer 2009Published annually

Illinois State UniversityDepartment of Finance, Insurance, and Law Campus Box 5480Normal, IL 61790-5480

E-mail: gkoppen@ilstu.eduWeb site: www.cob.ilstu.edu/fil

2 Summer 2009

Gamma Iota Sigma Alumni Golf Outing

Student internships, summer 2008–spring 2009The Department of Finance, Insurance and Law provides experiential learning opportunities for our students through internships with our business partners. Based on the idea that students learn best through experience, the department sincerely appreciates the sponsorship by the firms listed below. If your firm is interested in participating in the internship program, please contact Kim Small, Finance internship coordinator, at (309) 438-2928 or khsmall@ilstu.edu, or Debbie Babcock, Insurance internship coordinator, at (309) 438-3368 or dababco@ilstu.edu.

Summer 2008Brett Anderson Bank of AmericaMatthew Beach Town of Normal Finance DepartmentChristopher Behrns McLean County GovernmentThomas Byrne Chicago Partners-Navagant ConsultingKristin Church AIGDane Conaway State Farm BankVanessa Contreras London Internship, Katie School/NAPSLOShawn Cook Seabrook PlantationStacey Darin Enterprise Rent-A-CarMatt Decker COUNTRY FinancialThomas Doulas Rosemont Magic Touch, Inc.Patrick Doyle Arthur J Gallagher & Co.Ryan Doyle Arthur J Gallagher & Co.Derek Dudgeon Great Central InsuranceRobert Duerr Illinois State Export program, New ZealandMark Esposito Bermuda Internship, Katie School/AIGKymberly Forsythe First State Bank of Bloomington

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DiscLosuRe 3

Faculty member news and recognitionEach year the Department of Finance, Insurance and Law publicly recognizes the outstanding efforts of its full-time faculty members in the scholarship of teaching, the scholarship of discovery and scholarly service to the institution. In 2009, the following individuals were recognized for their exemplary performance: Joseph

Solberg, professor, for outstanding teaching; Yu-Luen Ma, associate professor, for outstanding research; and Edgar Norton, professor, for outstanding service.

The College of Business MBA Association selected Kevin Ahlgrim, assistant professor, as the 2007–2008 Outstand-ing MBA Professor of the year. The same graduate student organization selected Sylvie Bouriaux, associate professor, and Carson Varner, professor, as the 2008–2009 Outstand-ing M.B.A. Professors of the year.

Kevin Ahlgrim has been promoted from assistant professor to associate professor with tenure. Ahlgrim teaches

undergraduate Investments, undergraduate Introduction to Risk and Insurance, and M.B.A. Financial Management. His research focus is in enterprise risk management.

Yu-Luen Ma, associate professor, was awarded the designation of College of Business Caterpillar Faculty Scholar for 2009–2010. The award recognizes a consistent record of high quality scholarship and teaching that helps advance the College of Business and strengthen the education of FIL students.

On May 15, 2009, William L. Scott, professor, retired as a Department of Finance, Insurance and Law faculty member after 25 years. Scott served as chairperson of the department on two different occasions and as internship coordinator for finance. He is known among the finance academy for his work on the operations of financial institutions and markets. He will relocate to Tallahassee, Florida, with his wife Salli.

The department has hired two new tenure-track assis-tant professors starting in the fall 2009 semester. Abhishek Varma holds a Ph.D. from Washington State University

and supports the new financial planning curriculum. Katrin Varner holds a J.D. and Master of Human Resources and Industrial Relations from the University of Illinois and instructs courses in business law.

FIL students active in Honors ProgramThe Illinois State University Honors Program attracts highly motivated students with a strong record of academic success and the potential for further success in their careers. The criteria for admission to the Honors Program includes a minimum cumulative grade point average of 3.3/4.0 and minimum enrollment in honors credit hours each semester. The faculty of the Department of Finance, In-surance and Law has been a strong supporter of departmental honors, which has requirements beyond the university program for Finance and Insurance majors.

In the spring 2009 semester, FIL Honors students held the greatest share of honors participation among all College of Business departments with 38 percent of the COB total. One in nine finance majors and one in 14 Insurance majors are members of the departmental honors program. In addition, the department has the second largest number of Honors Program students of any department on Illinois State’s campus. FIL Honors students exemplify the culture at Illinois State, described in its mission statement as a diverse community of scholars.

Christopher Franchi State Farm BankMatthew Fritzshall Stepping Stone PropertiesJeremy Gallico Zurich Internship, Katie SchoolAmy Gudenrath Carle HospitalDesiree Hahs Kankakee County Finance DeptSarah Hamad Edward JonesLinda Han Enterprise Rent-A-CarJustin Harrison Tamayo Financial ServicesSteven Hempel Maryland Pig Iron ServicesJeffrey Henderson Assurance AgencyAdam Hickerson Chicago Board Options ExchangeMarci Hill Strategic Wealth ManagementStacey Hinterlong Northwestern MutualMichael Jewell Rim LogisticsJulie Joyce Midwest Insurance CompanyKen Kamentsev State Farm BankDanielle Kinsella Ameriprise FinancialDaniel Knapp Comptroller of the CurrencyChad Lucarelli Northwestern MutualPatrick Lyons LYO TradingMark Maroon COUNTRY Trust BankRees Mason Sibling Entertainment, NYCGayatri Mishra Eurex-ChicagoCordero Mobley Electro-Motive DieselDakin Munson State Farm InsuranceMatt Neustadt ThinkPanmureBrian Nolte COUNTRY FinancialJon Perry Bermuda Internship, Katie SchoolVincent Porter, Jr. American Service Insurance CompanyRonnell Robinzine State Farm InsuranceRyan Royer Archer Daniels MidlandEric Samp Connor and Gallagher Insurance Services Inc.Kimberly Schmehr Allstate InsuranceJennifer Sommer Mass Mutual Financial GroupRyan Stolarik Northwestern Mutual

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Internships, continued

Yu-Luen Ma

William L. Scott

4 Summer 2009

Benjamin Tiffany Zurich Internship, Katie School/COUNTRY FinancialKane VanZuiden Neubauer Darr Agency Inc dba The Insurance GroupAndy Vuong COUNTRY FinancialLauren Wagner London Internship, Katie SchoolDana White COUNTRY Trust BankMarkus Zielbauer Infinity Brokerage

Fall 2008Doug Adams COUNTRY FinancialDavid Aremka Zurich North AmericaJaDawn Bryant COUNTRY FinancialRob Foreman Busey BankJake Gruimond COUNTRY FinancialJoni Ishmael GROWMARK, Inc.Christian Jimenez State Farm InsuranceDylan Keiser Caterpillar Inc.Mark Killian Illinois Environmental Protection AgencyLian Lucas Town of Normal Finance DepartmentBeth Massaro Caterpillar Inc.Rachel Vining Daily Vidette, Illinois State University

Spring 2009Abby Baggett Flanagan State BankBrent Denton Northwestern MutualRachel Frazelle Mike Wehrenberg State Farm AgencyMary Hamilton Rick McLean State Farm AgencyLashawn Johnson COUNTRY FinancialTim Kaupp Northwestern MutualChristine Kunnath InBankBen Libert Heartland BankThomas Mullins Morgan Keegan & CompanyDakin Munson Caterpillar Inc.Kevin Orna Town of Normal Finance DepartmentMark Scheiner Mike Wehrenberg State Farm AgencySabrina Stout University Housing Services, Illinois State UniversityChad Wills COUNTRY Financial

Professionals share insights with FIL studentsSpeakers are listed below that visited campus as part of the fall 2008 and spring 2009 semesters for classes and student organizations. The topics of the presenta-tions included corporate finance, commercial banking, financial planning, finan-cial crises, insurance, investments, real estate, and risk management.

The Department of Finance, Insurance and Law extends sincere thanks to the individuals and firms that visit campus and share their knowledge and experience in support of our degree programs. If you or your firm has an interest in making a presentation on campus or sponsoring company visits, please contact the FMA or Beta Gamma Sigma faculty advisors.

Annual Student Recognition DinnerThe Department of Finance, Insurance and Law’s annual Student Recognition Dinner was held on April 8, 2009, at the Doubletree Hotel in Bloomington. The student award winners were recognized before proud parents, faculty members, and members of departmental advisory boards. Gary Koppenhaver, depart-ment chair, presented the finance major

awards and Jim Jones, director of the Katie School of Insurance and Financial Services, presented the insurance major awards. Interim Dean of the College of Business Charles McGuire, a former chairperson of the department, welcomed the gathering of 252 people.

The 2009 Outstanding Senior in Finance is Dane Conaway from Mt. Zion. The 2009 Outstanding Senior in Insurance is Jon Perry from Waukegan.

Blake Ahrens TLI Insurance Roger Andrews E.D. Bullard Brian Beckham Jeffery Bloom John Deere Mark Burns COUNTRY FinancialErin Carr Arch Insurance Aaron Curtis MIDCO/COUNTRY Financial Dave Deneen Wachovia SecuritiesKevin Drucker Cornerstone Bank Robert Dunn Assurance Dick Erickson Kraft Foods Robert Fazzini Busey Bank Mark Fennelly State Farm InsuranceBen Franklin Franklin Financial Adam Johnson State Farm InsuranceJim Jones Illinois State University

Clark Kays Aon Emily Kerwin Caterpillar, Inc. Kevin Kingston Kingston Financial Gary Koppenhaver Illinois State UniversityDan Kugler Snap On Tools Larry Lonis Bank of America Michael Mangino BPAndrew Nottestad GGPNancy Philipsen State Farm InsuranceNick Potthoff Northwestern MutualBonita Poynter Kraft FoodsJames Pribel CME GroupMaureen Roach Illinois State UniversityMike and Ann RuesyCOUNTRY Trust BankEric Schlipf Morgan StanleyJeff Secord Clifton Gunderson

Tom Shadid Illinois State UniversityKen Stewart MetlifeJennifer Stokes Caterpillar, Inc.Ric Stuck Caterpillar, Inc.Jeff Telling Family Credit CounselingJenny Thayer COUNTRY FinancialBrian Udy Hartford Steam BoilerAaron Vaughn Edward JonesTony Wahls State Farm InsuranceMatthew Weber State Farm BankKay Weir Illinois State University

Student Matt Flynn and family

Internships, continued

Matthew Weber

Educational Investment Fund Board of Directors 2009Mark J. BurnsCOUNTRY Financial

David DeneenWachovia Securities

Frank J. Haggerty, Jr.Duff & Phelps Investment Management

Michelle HermannPark National Bank

Thomas S. HoweIllinois State University

Nathan JacobsCoe Capital Management

Scott D. JohnsonIllinois State University

Gary D. KoppenhaverIllinois State University

David L. MisticUS Bancorp

Edgar A. NortonIllinois State University

Nancy PhilipsenState Farm Insurance

Jeffrey R. SecordClifton Gunderson Financial Services

Jennifer SwearingenState Farm Bank

Doug ThroneburgFirst American Bank

Mike TowlerNorthern Trust Corporation

Aaron VaughnEdward Jones

Greg WhiteAurora

Finance, Insurance and Law Advisory Board 2009Stephen BerchemJ. P. Morgan Chase

Brian BruceCenter for Investment Research and Analysis

S.J. ChangIllinois State University

Daryl DagitCiti Smith Barney

Thomas G. EsteyThe PrivateBank

Scott HintzState Farm Insurance

Scott D. JohnsonIllinois State University

Scott JoyceWachovia Securities

Gary D. KoppenhaverIllinois State University

Larry LonisBank of America Private Wealth Management

John LustIllinois State University

Dean McNaughtCaterpillar Inc.

Greg MorrisArcher Daniels Midland

Terry M. NicholsState Farm Insurance

Charles NormanWachovia Securities

Nancy PhilipsenState Farm Insurance

James PribelCME Group Inc.

Robert W. Rush, Jr.COUNTRY Trust Bank

Michael J. RybakBecker Conviser Professional Review

Jeffrey R. SecordClifton Gunderson Financial Services

DiscLosuRe 5

Department of Finance, Insurance and Law Donor RollJanuary 1, 2008 – May 31, 2009Anthony Amponsah Baxter Credit UnionColm and Helen BrewerDennis Bull Center For Investment ResearchRodney and Marvis CusterCarl Davison David and Kathleen DeneenRandal and Lynn DotyMark and Mindy FinchPaul Frey and Susan DegregorioDevon and Janice HudsonDiane Johnson Gary and Kay KoppenhaverColin Marquis Patrick McLaughlin Robert and Nancy MeyerDavid Mistic Addie Moy Edgar and Rebecca NortonDebra Parker Anton Roussev and Anelia RoussevaRobert and Annette RushThomas Schaeffer Jeffrey and Carol SecordJennifer and David SwearingenJoseph W. and Connie L. TrefzgerCarson and Iris VarnerMark Whitlock Michael and Jacqueline Wright

Financial Management Association updateThe Illinois State University student chapter of the Financial Management Association (FMA) brings finance students into contact with career information and networking opportunities through on-campus speakers and off-campus field trips. Six speakers vis-ited FMA meetings in fall 2008, and eight speakers visited in spring 2009. Their topics ranged from con-sumer debt management to real estate investing. In October 2008, a panel of eight FMA members who completed internships in summer 2008 shared their experiences with other students and offered sugges-

tions on finding internships in the near future. Also in October, the FMA took a field trip to three organizations in the northern Chicago suburbs—Kraft Foods, the Village of Lincolnshire, and Coe Capital Management.

In January 2009, six FMA members (Tracy Hedrick, Melinda Olson, Heidi Traple, Tiffany Nichols, Ashley Barber and Danielle Dunn) participated in Illinois State’s Expanding Your Horizons program. The event highlights careers in finance for students visiting campus, and is designed to encourage primary and secondary grade students, especially women, to consider pursuing studies that will lead to jobs related to math and science. In April, FMA students traveled to Elmhurst to meet with Illinois State alumni and attend a panel presentation of finance professionals. The three Illinois State graduates on the panel were Michael O’Keefe, J.P. Morgan Real Estate Banking; and Michelle Rojo and Charles Sherburne, Bank of America. Other panelists were Paul Gantzert, Gantzert Investment Company; Larry Lonis, Bank of America; and David Umlauf, David Thomas Partners. The panel members described different career paths in finance, shared insights from work experiences, and offered advice on dealing with a difficult job market.

Melanie Angelatos and Brandon Miller, FMA officers

Donations and the challenge of continued successEvery gift to the Department of Finance, Insurance and Law can make a difference in someone’s life. Our donors believe in the promise that education can lift people up and afford them a chance to make a better life.

The Department, in partnership with dedicated and committed donors, puts private support to work to raise people and programs. Whether it is an award for a deserving student, data necessary for a research project, or a scholarship to help recruit the best students to our programs, your contribution can help ensure the excellence of our majors.

To help the Department make a difference, complete and mail the alumni and friends gift form on this page. Please make your check payable to the Illinois State University Foundation, FIL–548-5270.

The students, faculty, and staff of the Department of Finance, Insurance and Law sincerely thank all of those that have supported the department and Illinois State University this past year. Your investment helps define the department and makes a continuing impact where it matters most to you.

Name

Address

Phone Donation amount

The enclosed donation is for FIL Foundation account 548-5270.

Mail to: Illinois State University Foundation, Campus Box 8000, Normal, IL 61790

This document is available in alternative formats upon request by contacting Gary Koppenhaver at (309) 438-8777

An equal opportunity/affirmative action university encouraging diversity University Marketing and CoMMUniCations 09-0091 printed on recycled paper

Department of Finance, Insurance, and LawCampus Box 5480Normal, IL 61790-5480

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