Local Main Street independent insurance agents are getting a raw deal as the result of settlement agreements that ban contingent commissions or proscribe disclosure procedures, according to Georgia Commissioner of Insurance John Oxendine, who says he has not signed off on such agreements and never will.

Oxendine’s comments were made in an interview published in the February 12 issue of Insurance Journal.

“Insurance agents, especially the local neighborhood agent, they’re really, really getting a raw deal on this,” said Oxendine. “I will tell you that as the advocate for consumers in the state of Georgia, my mumber one ally is that local neighborhood Main Street agent. They’re the one out there fighting for the little guy.”

Oxendine said that some commercial brokerage firms and insurance companies “have done bad things, but what they’re trying to do is put it back on the local agent, and that’s wrong. You don’t punish the local agent because somebody else did something wrong.”

“There is nothing inherently wrong with a contingent commission,” Oxendine continued, “It’s a bonus. All a contingent commission is, is a Christmas bonus. What is wrong is when individual large brokerage firms and companies working with those firms misuse the principle of contingent commissions, and that’s what happened. It was individuals misused it. You don’t punish the innocent, you punish the guilty.”

“For that reason, I have not signed [the] Zurich [agreement], I never, ever will because it is fundamentally wrong,” Oxendine said. “I am very disappointed in those attorneys general that participated in it. We’ve taken a position in Georgia that our attorney general does not have any jurisdiction to even deal with the issue.” Oxendine added that he would give the same answer to settlements similar to the Zurich settlement and added that in his state, “we would actually prevent our attorney general from sticking his nose into the insurance industry. If he started to, we would probably seek legal action against the attorney general to enjoin him from doing that.”

PIA of Georgia has been working closely with Commissioner Oxendine, advocating PIA’s position with him and providing him with regulatory and legal arguments.

Offline Resource: "Oxendine Defends Main Street Independent Insurance Agents" (Insurance Journal Southeast Region, 2/12/07)

February 27, 2007