‘Line in the Sand’ Unites Agents, Brokers Against Real Enemy: Garamendi

Many of our allies in the fight against the Garamendi Agenda were puzzled by IBA West General Counsel Steve Young’s open hostility toward the Western Insurance Agents Association’s “Line In The Sand” campaign on full display in Insurance Journal’s June 20th edition.

Rather than applauding WIAA’s efforts to defend insurance producers against the Garamendi Agenda or offering a substantive defense of his organization’s position favoring additional producer disclosure, Young instead used the June 20 article as yet another venue to continue his war of words against WIAA members, our Board of Directors, and oddly enough, me personally.

In the report, Young claims we have “misrepresented and distorted what IBA West stands for,”but he failed to offer any examples of how we have misrepresented anything about IBA West.

To begin with, we have not made any statement that could be remotely construed as misrepresenting what IBA West stands for. What we have done in our publication is factuallyreport onthecontradicting positionsthat IBA West has taken on the disclosure issue. The content was obtained from the IBA West Web site, official minutes from the CDI, the 2004 IBA West Annual Report and public letters written by Young himself.

As an example, the”Line in the Sand” piece states, “The IBA West Board of Directors recently adopted a statement of policy calling on brokers to fully disclose all of the compensation that they receive from insurance companies or third parties and has been working secretly with the CDI since April 2004, drafting new disclosure requirements.” This statementabout theirpositionis published on pages 4, 8 and 9 of the 2004 IBA West Annual Report, which can be viewed on their Web site.

On behalf of IBA West, Young claims that”we have spent an immense amount of time and effort building a coalition to present a united front in opposition to Garamendi’s agenda.”

That statement conflicts with what he personally told the Commissioner on Nov. 10, 2004, as recorded by the CDI in their minutes, “His organization understands and supports the Commissioner fully in an effort to expand upon that requirement and to require full dollar disclosure and to also disclose potential compensation through profit sharing and other agreements.”

With regard to working with CDI staff, Young’s only response was to say that if he was meeting secretly with the department, that was news to him. However, in the 2004 IBA West Annual Report, Young says the following, “IBA West was working quietly behind the scenes with the Department of Insurance since April (2004).” He goes on to say, “In part as a result of those efforts, the Department began moving, quietly, to revise its proposed regulations . . .” IBAWest National Director Andrew Valdivia stated in the President’s Report, “IBA West worked quietly for months with the department’s legal staff to assist in the development of potential regulations focused on better disclosure by brokers and prohibiting specific wrongful acts.”

The inconsistent and wavering policy statements emanating from IBA West are hindering the efforts for the rest of the industry to have a unified voice in fighting against the proposed unnecessary disclosure regulations. Agents and brokers deserve and need one loud, steady voice forcibly arguing on their behalf.

Perhaps IBA West’s difficulties in offering a consistent position begin with the fact that a contract lobbyist represents them. It is nearly impossible to zealously and loyally advocate the positions of multiple clients, especially when 17 of them are insurance interests, including seven insurance associations, six insurance carriers and four with some direct insurance industry nexus.

WIAA has chosen to forgo paying almost $600,000 per year in lobbying fees, choosing instead to employ a lobbyist in-house, enabling WIAA to operate with a remarkable clarity of purpose in protecting and defending our members. We are not forced to simultaneously balance a multitude of conflicting positions or moderate our views in order to not offend or alienate any of the other insurance clients represented by our lobbyist.

In closing, the stakes for insurance producers in California could not be higher. We’ve heard from our members and we will not let the IBA West’s desire for an intra-industry feud deter us from our mission of protecting honest, hardworking agents and brokers from the Garamendi Agenda. It is time for IBA West to get on board with the rest of the industry so that all of our resources will be aimed in the same direction.

Alan A. Smith, Jr. is president/CEO of the Western Insurance Agents Association. Until Dec. 31, 2002, WIAA was an affiliate of PIA in California, Nevada, Arizona and New Mexico and operated as the PIA Group. WIAA no longer has any affiliation with PIA. Smith can be reached at (800) 553-4221.