The following is an open letter from John D’Agostino, President of the Professional Insurance Agents of New Jersey, concerning the state’s enactment of legislation to protect the ownership rights of insurance agents to the policy information they collect and maintain. It is of sufficient importance to every agent in the country that the full text is reprinted, as follows:
As independent agents in New Jersey, we’ve seen companies transfer our books of business at an increasing rate as companies discontinue writing auto insurance and transfer policy information to other insurers. The policy information included in these transfers is our bread and butter. It is our reputations, our relationships and our property, upon which we have built our livelihoods.
Agents acquire policy information at their own expense to service accounts and renew coverage for their customers. Taking years to develop, this information is so vital, that when a producer sells his or her agency, the value of renewal commissions generated on the agency’s books of business is used in establishing the value and sale price of the agency.
This is why the Professional Insurance Agents of New Jersey Inc. worked rigorously to preserve agents’ ownership rights of policy information. At the suggestion of PIANJ, and with the leadership of immediate past President David Madara, CPCU, AAI, a bill (A.3319) was introduced in the Assembly this spring to protect agent ownership rights in their expirations during company book transfers. Assembly Banking and Insurance Committee Chair Neil M. Cohen, D-District 20, and Committee member Christopher “Kip” Bateman, R-District 16, were prime sponsors.
The Assembly approved the measure by a unanimous vote in May. The corresponding Senate bill, S-2385, sponsored by Sen. Stephen Sweeney, D-District 3, and Senate Republican Leader Robert Singer, R-District 30 passed June 23. On Aug. 16, Gov. McGreevey signed the bill into law. The law guarantees a company assuming another’s business can not refuse to recognize the agent as the owner of the business or refuse to pay commission to the agent.
I want to thank all those who provided testimony in support of the bill, the efforts of PIANJ immediate past President David Madara, CPCU, AAI, the Governor and the lawmakers in the Senate and Assembly who helped forward this measure. This is a significant victory for small business owners throughout the state, protecting the living of thousands of independent agents.
John D’Agostino Jr., CIC
Professional Insurance Agents of New Jersey Inc.
Was this article valuable?
Here are more articles you may enjoy.