A panel of the 1st U.S. Court of Appeals in Boston has affirmed a decision striking down Puerto Rico's countersignature law requiring a resident agent to sign off on nonresident agent policy sales.
The March 30 decision leaves only two other countersignature jurisdictions–Nevada and the Virgin Islands–where the insurance brokerage industry is litigating to vacate laws that require nonresident commercial insurance brokers to have the countersignature of a resident agent on each policy they sell.
Nevada's countersignature law was voided by a federal judge in a decision handed down in August of 2004. That decision was appealed by the state to the 9th U.S. Circuit Court of Appeals in San Francisco.
A panel there reviewing the lower court decision is now examining briefs submitted by the state and by the Council of Insurance Agents and Brokers, which is pursuing the litigation on behalf of its members.
The 9th Circuit will decide whether to hear oral arguments in the case or make a decision based on the briefs, a CIAB staff official said.
No trial date has been set in the Virgin Islands case, the spokesman said. The decision in Puerto Rico is not yet final because the commonwealth still has 90 days to seek a Supreme Court review of the ruling.
Although it is unlikely the Supreme Court will accept the case for review, agents and brokers should continue to comply with existing law until the commonwealth has exhausted its review rights, the CIAB official said.
The CIAB is notifying judicial authorities in both Nevada and the Virgin Islands of the Puerto Rico decision in hopes of speeding resolution of those cases, she added.
CIAB lawsuits have resulted in countersignature requirements being declared null and void in Florida, West Virginia and South Dakota.
The CIAB won its first countersignature lawsuit in Florida in September 2003, followed by similar victories in Nevada, South Dakota and Puerto Rico. In West Virginia, where the CIAB also had filed suit, the state legislature rescinded the countersignature law rather than attempt to defend it in court.
"These requirements are a throw-back to the days of protectionism, and they have no place in today's global economy," said Ken Crerar, CIAB president. "We moved on this front because it significantly impacts the business of our members. We believe our lawsuits have saved CIAB members hundreds of thousands of dollars in annual expenses."
U.S. District Judge Jos? Antonio Fust? originally struck down Puerto Rico's countersignature statue in March of 2005, and Puerto Rico's insurance commissioner, Dorelisse Juarbe Jim?nez, then appealed the judge's ruling.
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