Declarations

Soundly defeated

“We’ve learned that we need not fear voters won’t understand the benefits of credit scoring and will respond on basis of their own interests. I think we had a fairly good idea that we were going to win. But we were surprised at how loud and clear the message resonated with the voters.”

— Kenton Brine, northwest regional manager for the Property Casualty Insurers Association of America, commenting on the rejection of Oregon’s Measure 42. The measure would have banned insurers’ use of credit scoring, but was rejected by a nearly two-to-one margin in the November mid-term elections.

A fresh start

“The hope is that Poizner will foster a more positive tone in the [insurance] commissioner’s office. Insurers and the insurance commissioner are not adversaries. Rather, we are partners in seeking to achieve a healthy insurance environment that benefits all California consumers.”

— Sam Sorich, president of the Association of California Insurance Companies, commenting on the election of Steve Poizner to the office of California Insurance Commissioner.

Declaration of war

“The American Reliable settlement agreement, in our view, grossly mis-states the current law of California on important issues of ‘agent vs. broker’ capacity. It represents nothing less than a declaration of war on every insurance broker in this state and every customer served by every insurance broker.”

— Steve Young, general counsel for the Insurance Brokers and Agents of the West (IBA West), commenting on the California Division of Insurance’s decision to designate a settlement agreement it formed with American Reliable as “precedential,” which could be given the force of law. California’s Office of Administrative Law has agreed to review IBA West’s petition to review the decision, and is accepting comments until Dec. 11. The OAL expects to rule on the merits of IBA West’s petition by April 9, 2007. IBA West is optimistic that OAL will invalidate the commissioner’s actions, Young said.

Crucial commissions

“Half of all agencies in the U.S. depend on the extra amount of income brought in by contingency commissions to move profit and loss records from red to black. It determines whether we are profitable or not.”

— Alex Soto, president of the Independent Insurance Agents and Brokers of America, commenting on why contingent commissions are important to the insurance industry and why the illegal practices of some large brokers should not be confused by legal practice of earning and accepting payments that is used by many agents and brokers nationwide. Soto contends that contingent commissions are not bad in every context, and not all brokers that use commissions are operating unethically. He recently was a featured speaker at the Independent Insurance Agents of North Carolina annual conference in Asheville, N.C.