WIAA Objects to In-House Producer Disciplinary Hearings in California

The Western Insurance Agents Association is throwing up some objections to a California Department of Insurance proposal that would enable the department’s hearing bureau to adjudicate agent/broker and carrier disciplinary proceedings.

Producer disciplinary proceedings in California have been held for more than 50 years in the state Office of Administrative Hearings, a separate body with independent administrative law judges who handle disciplinary matters for most government agencies in the state, WIAA argued.

CDI’s proposal would allow the insurance commissioner to choose which cases would be kept in-house and which would be heard by OAH.

WIAA’s arguments include:

It’s inappropriate for CDI judges to issue rulings best made by independent judges because these decisions can affect the ability of a licensee to earn a living.

The department’s request for attorney fees and costs raises due-process issues in terms of affordability for producers if they lose, and would likely prevent agents and brokers from pursuing their rights to a hearing.

The department’s hearing bureau, which would take the cases the commissioner doesn’t farm out to OAH, was established following Proposition 103 to rule on rate cases. Because these cases are highly complex and involve actuarial and other technical data, the bureau’s judges have special training.