A bill that would protect agent’s ownership of their expirations, initiated by the Professional Insurance Agents of New Jersey, has been released in a unanimous vote by the State’ Senate’s Commerce Committee.
The legislation, S. 2385 co-sponsored by Sen. Stephen M. Sweeney (D-District 3), and Sen. Robert W. Singer (R-District 30), would “protect the livelihood of tens of thousands of independent agents, by preserving their ownership and commission rights when an insurance company transfers its policy obligations to a new company,” said the PIANJ. It has already won approval by the Assembly Banking and Insurance Committee, which unanimously released A.3319, under the sponsorship of Assemblyman Neil M. Cohen (D-District 20) in March. The legislation now heads to the Assembly for a floor vote later this month.
PIANJ President David Madara, CPCU, AAI provided testimony to the Commerce Committee. “This is a fundamental issue to the livelihood of independent agents throughout the state,” Madara stated. “Insurance companies cannot be allowed to transfer a book of business without recognizing the agent as the owner of the renewal rights.”
The announcement explained that “Insurance agents build their books, comprised of client information, at their own expense, to provide service to and renew coverage for their customers. Virtually all contracts between independent insurance agents and companies declare the agent to be the exclusive owner of this information.”
“This information is the foundation of customer relationships that take years to develop,” Madara indicated. “Without the protections provided in this bill, insurance producers are at risk of losing their most valuable assets when a company decides to transfer its business.”
In recent years, Madara told the committee, transfers of business have increased, including several companies that discontinued and transferred their personal automobile insurance business. When an insurance company ceasing to write business finds another to assume its obligations to provide coverage, it will transfer policy information to the new company so it can offer additional coverage to policyholders.
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