Following the notice of proposed new disclosure regulations by insurance Commissioner John Garamendi, the American Agents Alliance has released a statement regarding its position on the Commissioner’s announcement.
“After reviewing the Commissioner’s proposed regulations concerning broker fiduciary duties, we find that a higher standard of care is being imposed on producers securing insurance quotes and creating financial disclosure requirements with insurers. This is not needed in the personal insurance industry,” said Alliance President David Nielson, CIC. “The regulations would apply to both brokers and independent agents who seek insurance quotes for customers. Therefore, it affects most of our industry.”
Nielson continued: “With these proposed regulations, the Commissioner is punishing personal lines producers for alleged improper rate bidding practices by large commercial brokers and insurers as a result of the recent investigation and suit by the New York Attorney General, which has attained national attention. This is a knee jerk reaction by the Commissioner to a problem that does not exist in our industry, and the Alliance plans to vigorously oppose these regulations. We need all producers, brokers and independent agents alike to fully understand the adverse implications of these proposed regulations.”
The independent producers association believes that the regulations, as proposed, would cause such ambiguities in the way producers would be required to conduct business that full compliance would be almost impossible. The Alliance encourages all California insurance producers to join them in their efforts to ensure that the proposed regulations do not become the law of the land.
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