WIAA SUBMITS COMMENTS ON LATEST GARAMENDI AGENDA PROPOSAL:

The Western Insurance Agents Association submitted comments to the California Department of Insurance opposing yet another over-reaching proposed regulation impacting the insurance industry. Michael J. D’Arelli, vice president, Legislative & Regulatory Affairs for WIAA, submitted formal opposition to regulations proposed by the Department that prescribe methods for appointing and terminating insurance agents. Specifically, D’Arelli’s comments addressed Section 2194.43(a) which requires insurers to submit the termination of company appointments in writing if the agent has been terminated for cause and further requires the insurer to submit an explanation of the “for cause” termination. “There is no statutory authority requiring insurers to explain their reasons for termination of an agent. The current process is efficient and offers complete transparency,” said D’Arelli. Currently, insurers are required to sign Form 447-54T if the insurer believes the agent may have violated the Insurance Code. It does not require information pertaining to “at fault” terminations. D’Arelli continued, “With regard to Proposed Regulation 2194.43(a), there is no discussion or explanation concerning the authority of the Commissioner to require notification of “for cause” terminations. Proposed Regulation 2194.43(a) does not clarify existing law, but creates a new act and obligation on insurers (notification and explanation of for cause termination) which is not consistent with the Code. Lack of consistency and necessity also are reasons for rejection of the Regulations under Section 11349(a)(d) of the California Government Code.”

Topics Agencies Legislation