An agents group has submitted additional court papers arguing it has a right to object to Zurich Financial Services' settlement with 10 state attorneys general that it contends will saddle members with unnecessarily burdensome disclosure requirements.
The National Association of Professional Insurance Agents in a brief filed with U.S. District Court in Newark, N.J., argued the court should take its objections into consideration before the insurer's agreement goes into effect.
PIA responded to a Sept. 26 attorneys' general brief, which said the group had no right to be heard.
The Zurich agreement would settle accusations of bid-rigging, price-fixing and steering of insurance contracts by a few insurance brokers in return for the payment of lucrative, volume-based contingent commissions from Zurich.
Zurich has agreed to two different settlements involving 12 states, which in total would cost the company $325 million and require the company to stop paying contingent commissions on excess casualty business and require agent compensation disclosure notices to clients.
Len Brevik, PIA executive vice president and chief executive officer, said: “Agents were shut out of the negotiating process that led to these proposed settlements, and now the attorneys general don't want the court to hear our concerns. That is unfair and unconscionable.”
PIA agents have a stake in the court's decision and should be heard, the group argued. PIA filed a friend of the court brief (amicus curiae) in mid-September objecting to the agreement.
The association contends that the attorneys general are wrong in their assertion that the PIA's concerns should wait until after the court decides to impose the agreement.
The attorneys general from California, Florida, Hawaii, Maryland, Oregon, Texas, West Virginia, Massachusetts, Pennsylvania and Virginia filed the opposing brief.
PIA countered, saying in its brief: “This court should avoid the waste of time and resources that would result from deferring PIA's objections. Efficiency and justice demand that they be addressed now.”
Part of the objection concerns the notices which would have to be given by independent agents, and not the company, to policyholders.
In addition to PIA, the Independent Insurance Agents & Brokers of America has filed an amicus curiae friend of court brief objecting to the Zurich agreement.
Besides objections to the method of disclosure, agents also object to the barring of contingent commission payments. The associations contend that the agreements usurp the power of states to regulate insurance.
A spokeswoman said the IIABA plans to file its own response to the attorneys' general objections some time next week.
For its part, Zurich filed a letter with the court contending that the portions of agreement the associations object to are too intrinsically entwined with other settlement agreements to remove them from the court's decision.
Zurich argued that any objections to the decision should be examined after the implementation.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
