The Independent Insurance Agents & Brokers of America, Inc. (Big “I”) has taken issue with critics of its opposition to a class action settlement on producer compensation, critics who claim the agents’ opposition brief is premature.
The agents’ association argues that its opposition in the proceeding is appropriate because the proposed settlement would have real “negative consequences” for its member agents and consumers if approved by the court.
The class action lawsuit concerns producer compensation and disclosure provisions in a Zurich Insurers settlement agreement. The Big “I” reply brief filed in New Jersey federal court on Oct. 20 refutes state attorneys general who opposed agents’ participation in the court approval process.
The Big “I” amicus curiae brief focuses on the burden imposed on agents and brokers by the Zurich settlement agreement entered into on March 2006 mandating that agents and brokers provide insureds with the company’s compensation disclosure form.
Opposition to the Big “I” brief was filed by the intervening attorneys general who signed the multi-state settlement agreement with Zurich, the plaintiffs and Zurich. The essence of their opposition was that the Big “I” amicus curiae brief was filed prematurely; none of the opposition questioned the credentials of the Big “I” to advise the court regarding the impact that the Zurich settlement will have on brokers and agents.
The National Association of Professional Insurance Agents has also filed a brief refuting the stance of the state attorneys general.
“The Big “I” amicus brief provides the court with important information about the negative consequences consumers as well as insurance brokers and agents will experience if the court approves the portion of the proposed Zurich settlement requiring brokers and agents to provide their customers with Zurich’s mandatory disclosure form,” says Big “I” President Alex Soto, also president of Miami, Fla. based InSource, Inc.
“Imposition of this form on agents and brokers will inhibit agents and brokers’ communication with their customers and increase customer confusion regarding incentive compensation.”
The intervening attorneys general represented to the court in August 2006 that they intend to seek court approval of the Zurich settlement, which includes the requirement that brokers and agents provide their customers with the mandatory disclosure statement,” according to Big “I” Chief Executive Officer Robert A. Rusbuldt. “If it was timely for them to intervene in August for that purpose, our request to appear as amicus curiae is timely now,” Rusbuldt said.
Contrary to suggestions by the opposition, the Big “I” does not oppose “pre-binding disclosure” of incentive compensation; rather, it opposes the proposed requirement that brokers and agents provide their customers with Zurich’s mandatory disclosure form, explained Soto.
“The Big “I” was not a party to the negotiations and had no opportunity to raise its concerns about the mandatory disclosure form before the Zurich Settlement requiring it was executed,” Rusbuldt added.
“By filing now, the Big “I” is giving the settling parties the opportunity to revise the mandatory disclosure form provision voluntarily,” noted Debra L. Perkins, Big “I” executive vice president and general counsel.
“Zurich represented to the court that compensation disclosure was something that the state insurance regulators and attorneys general that signed the multi-state settlement ‘required Zurich to undertake’ so the Big “I” believes that the court’s order should reflect what Zurich acknowledged -that the obligation to deliver the mandatory disclosure form to consumers belongs to Zurich, not to insurance brokers and agents,” explains Perkins.
Rusbuldt said his organization “continues to support the latitude that agents and brokers should have to customize their interactions, including about compensation disclosures, to the specific requests and needs of their customers.”
To read the complete reply brief, please visit www.independentagent.com http://www.independentagent.com/.
Source: Independent Insurance Agents & Brokers of America, Inc.
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