Agents Gearing Up For Disclosure Fight In Calif.

Agents Gearing Up For Disclosure Fight In Calif.

By Mark E. Ruquet

NU Online News Service, April 14, 3:18 p.m. EDT?California independent agents and brokers said they plan a major lobbying effort to kill a legislative proposal described by the state's insurance commissioner as a measure to protect consumers from secret broker commissions.[@@]

On April 20, independent producers are being called on by the Insurance Brokers & Agents of the West to assemble at the state capital in Sacramento to protest SB 938, a legislative proposal that would tighten commission and fee disclosure regulations for the state's agents and brokers.

Their effort is planned for the same day that the state Senate Banking Finance and Insurance Committee is scheduled to hold a hearing on the bill.

The Oakland, Calif.-based association is holding a 10:30 a.m. briefing for producers in Sacramento. After the briefing, the IBA West is calling on agents to drop in on their state legislators to voice their dissatisfaction with the proposed legislation.

The association is also pushing a letter writing campaign aimed at defeating the bill.

The legislation, proposed by state Sen. Joseph Dunn, D-Santa Anna, has the strong support of California Insurance Commissioner John Garamendi.

"This is about making it clear that brokers, and agents working as brokers, put the interest of their client first?and not their own financial gain," he said in a statement yesterday.

According to Mr. Garamendi, the bill would require agents and brokers to reveal to the buyer the amount of compensation the producer received, the number of quotes they obtained in search of insurance, and who they received the quotes from. It would also prohibit producers from receiving compensation from insurers if the customer has paid a fee.

For its part, IBA West calls the rules "overkill" and "inconsistent" with the traditional definition of an agent and broker.

"The insurance commissioner has impugned the integrity of every insurance professional in California by alleging that consumers have been victimized" by producers, the association said.

Patty Lombard, a spokeswoman for IBA West, said that since the call went out Monday, the association has received several hundred letters from members opposing SB 938.

Thus far, she said, a handful of agents whose representatives sit on the committee have committed to attend the hearing and meet with the representatives. She called that number significant since these agents were changing their plans on short notice.

"It clearly indicates our members' concerns with how the bill will affect them if SB 938 is passed," Ms. Lombard said.