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Insurers Prevail on Agent Termination Bill

If there is one constant philosophy found in the legislative process, it is a strong reluctance by lawmakers to interfere in the contractual relationships that form a crucial part of the underlying

By Michael H. Adams | Updated on February 28, 2006

If there is one constant philosophy found in the legislative process, it is a strong reluctance by lawmakers to interfere in the contractual relationships that form a crucial part of the underlying structure upon which an industry is built. This is seen not only in the legal agreements between companies and consumers, but also between the legal relationships between the parties within the same industry. This public policy position was on full display when the House Insurance Committee recently debated a bill, which would have required insurers to give agents a 120-day notice when it decided to terminate their contract. Additionally, the 120-day notification provision could not be decreased per the terms of an agreement between an insurer and an agent, as is the case under current law.

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