CIAB Begins Arguments On Fla. Licensing
By Mark E. Ruquet
NU Online News Service, Jan. 30, 4:05 p.m. EST?The Council of Insurance Agents & Brokers said it will begin arguing its case before a federal district court that Florida's licensing regulations violate the equal protection clause of the Constitution.
The Washington, D.C.?based association said oral arguments would begin tomorrow in Tallahassee, Fla., in U.S. District Court for the Northern District of Florida before District Judge Robert Hinkle.
The association charges that the state's licensing laws for out of state brokers violate the Equal Protection Clause of the 14th Amendment and are in violation of the Commerce and Privileges and Immunities Clauses of the Constitution.
Under Florida's regulations, CIAB said, a non-resident insurance broker, even if he or she is licensed in the state, must be "accompanied" by a resident agent to solicit, negotiate or effect an insurance contract. The non-resident broker must pay the Florida agent half of the commission he or she earns on the completed deal.
In addition, under the state's "surplus lines" law, non-resident insurance brokers are barred from originating an entire category of insurance coverage.
The association said it is arguing that the laws are imposed solely for the financial benefit of Florida resident agents, punish non-resident brokers financially, and interfere with their relationships with their clients.
"This is a vestige of protectionism that simply will not go away on its own," said Ken A. Crerar, president of CIAB in a statement. "Are the Florida agents so out-of-step with the industry that they cannot compete on their own and need help from their out-of-state colleagues?
Mr. Crerar continued, "Since no work whatsoever is required and no effort whatsoever is expended, this counter-signature requirement is nothing more than an attempt to create revenue for Florida insurance agents."
The association said it also filed suit in in U.S. District Court, for the district of Nevada, on June 17, 2002, against Nevada over a similar counter-signature law. No date has been set for oral arguments in that case.
Wesley Bissett, vice president of state relations for the Independent Insurance Agents & Brokers of America in Alexandria, Va., said the association has been working with state legislators to eliminate counter-signature laws. Of 20 states that had them only a few years ago, only four?Florida, Nevada, South Dakota and West Virginia?still have them on the books.
The association, he added, supports federal legislation that would do the same nationally.
IIABA is not involved with the CIAB's suit, he said.
A request for comment from the Florida Department of Financial Services was not returned by press time.
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