CDI to Introduce Third Revision of Broker Fiduciary Regs

The California Department of Insurance has plans to introduce the third iteration of its broker fiduciary responsibility regulations, much to the chagrin of the American Agents Alliance. In October 2004, the DOI introduced its first proposed Broker Fiduciary Regulations. The Alliance formed a coalition to combat the proposed regulations. The coalition won the first round by identifying that the DOI failed to pass the litmus test for any regulation in showing any level of necessity, consistency, clarity and non-duplication. The DOI subsequently released a second version of the proposed regulations in spring 2005. Once again, the coalition thwarted the regulations. The DOI then sought a legislative solution and sponsored Senate Bill 938. The measure would have provided the commissioner with the authority needed to implement the regulations. However, SB938 died in the Senate Banking, Finance and Insurance Committee. “We at the Alliance and among the coalition are confused as to why the insurance commissioner continues to go to the well on this matter,” said Ken Nigohosian, the Alliance executive director. “He clearly has not shown any additional need for regulations governing broker fiduciary duties. This continued battle is simply an unnecessary drain of taxpayer resources that the Alliance and our coalition believe is unacceptable.”