January 14, 2005: Headlines: COS - Ethiopia: Insurance: State Politics: Los Angeles Business Journal: Insurance Industry Bristling Under RPCV John Garamendi's New Requirements
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January 14, 2005: Headlines: COS - Ethiopia: Insurance: State Politics: Los Angeles Business Journal: Insurance Industry Bristling Under RPCV John Garamendi's New Requirements
Insurance Industry Bristling Under RPCV John Garamendi's New Requirements
Insurance Industry Bristling Under RPCV John Garamendi's New Requirements
Insurance Industry Bristling Under Commissioner’s New Requirements
By LAURENCE DARMIENTO
Los Angeles Business Journal Staff
New broker regulations proposed by Insurance Commissioner John Garamendi following the scandal at Marsh & McLennan Cos. are under broad attack by the insurance industry, which calls them unnecessary, confusing and illegal.
The regulations require brokers to disclose all their compensation and to get the “best available” coverage for commercial clients, among other changes.
The industry has mounted an all-out assault against the regulations, testifying against them at a Sacramento hearing earlier this month. Some two dozen groups and companies have submitted critical comments to the insurance department.
“We don’t need new laws to stop bid-rigging and antitrust (activities),” said Dan Dunmoyer, president of the Personal Insurance Federation, a state trade group representing property and casualty insurers. “They already are illegal in California.”
Last year, the chief executive of Marsh, the world’s largest brokerage, was forced to resign after New York State Attorney General Eliot Spitzer accused company brokers of rigging bids from insurers and steering business to them in exchange for back-end commissions. (Earlier this month, a Marsh broker pleaded guilty to defrauding a customer, the first company employee to be convicted in the scandal.)
In response, Garamendi, who had said at the time he was conducting his own probe into the insurer, published the new regulations that he said would help prevent another such scandal.
Industry officials charge that the regulations are unnecessary and that the commissioner is making new law as opposed to interpreting law. They have particularly taken issue with the mandate that brokers get the “best available” coverage, saying that such a requirement would increase legal liability of what is considered a judgment call involving the weighing of varying factors.
“The proposed set of regulations proposed by Commissioner Garamendi is frankly just a stupid idea,” said Stephen Young, general counsel of Insurance Brokers and Agents of the West, a trade group that represent state insurance brokers.
Amy Bach, executive director of United Policyholders, a San Francisco-based consumer advocacy group that has filed purported class action lawsuits against brokerages over their commission practices, said she knew that the “best available” coverage mandate would draw heated response.
“It’s true the word ‘best’ is very loaded. I think (it) could be modified to be something like ‘appropriate’ or ‘most appropriate’,” Bach said.
Bach said her group would like to seek a compromise with the industry on that wording and other issues. “The industry tends to overreach whenever there is a proposed regulation, but they have got to know there is a problem that has to be addressed,” she said.
Garamendi spokesman Norman Williams said the department must consider the criticism before submitting the regulations for final approval to a state administrative law judge. While they may be amended, he said the commissioner stands by them. “He is very comfortable with these rules,” Williams said.
When this story was posted in January 2005, this was on the front page of PCOL:
| Ask Not As our country prepares for the inauguration of a President, we remember one of the greatest speeches of the 20th century and how his words inspired us. "And so, my fellow Americans: ask not what your country can do for you--ask what you can do for your country. My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man." |
| Latest: RPCVs and Peace Corps provide aid Peace Corps made an appeal last week to all Thailand RPCV's to consider serving again through the Crisis Corps and more than 30 RPCVs have responded so far. RPCVs: Read what an RPCV-led NGO is doing about the crisis an how one RPCV is headed for Sri Lanka to help a nation he grew to love. Question: Is Crisis Corps going to send RPCVs to India, Indonesia and nine other countries that need help? |
| The World's Broken Promise to our Children Former Director Carol Bellamy, now head of Unicef, says that the appalling conditions endured today by half the world's children speak to a broken promise. Too many governments are doing worse than neglecting children -- they are making deliberate, informed choices that hurt children. Read her op-ed and Unicef's report on the State of the World's Children 2005. |
| Our debt to Bill Moyers Former Peace Corps Deputy Director Bill Moyers leaves PBS next week to begin writing his memoir of Lyndon Baines Johnson. Read what Moyers says about journalism under fire, the value of a free press, and the yearning for democracy. "We have got to nurture the spirit of independent journalism in this country," he warns, "or we'll not save capitalism from its own excesses, and we'll not save democracy from its own inertia." |
| Is Gaddi Leaving? Rumors are swirling that Peace Corps Director Vasquez may be leaving the administration. We think Director Vasquez has been doing a good job and if he decides to stay to the end of the administration, he could possibly have the same sort of impact as a Loret Ruppe Miller. If Vasquez has decided to leave, then Bob Taft, Peter McPherson, Chris Shays, or Jody Olsen would be good candidates to run the agency. Latest: For the record, Peace Corps has no comment on the rumors. |
| The Birth of the Peace Corps UMBC's Shriver Center and the Maryland Returned Volunteers hosted Scott Stossel, biographer of Sargent Shriver, who spoke on the Birth of the Peace Corps. This is the second annual Peace Corps History series - last year's speaker was Peace Corps Director Jack Vaughn. |
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Story Source: Los Angeles Business Journal
This story has been posted in the following forums: : Headlines; COS - Ethiopia; Insurance; State Politics
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