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PIA Comments on Actions By New York AG Spitzer

WASHINGTON, October 18, 2004 - The National Association of Professional Insurance Agents (PIA) today commented on investigations by New York Attorney General Eliot Spitzer of...
October 18, 2004

WASHINGTON, October 18, 2004 - The National Association of Professional Insurance Agents (PIA) today commented on investigations by New York Attorney General Eliot Spitzer of alleged bid rigging by a national insurance broker.

"With hundreds of insurance carriers and thousands and thousands of insurance agents, the industry stands as a model for free and open competition," said PIA National Executive Vice President and CEO Len Brevik. "Consumers are cheated and the industry collectively receives a black eye if illegal bid rigging or price fixing occurs - even once, and we expect authorities to aggressively investigate any instances of alleged criminal anti-competitive activity."

"PIA has consistently stated financial transparency is in everyone's best interest," Brevik said. "We believe that brokers need to disclose placement service agreements prior to concluding a transaction."

PIA pointed out that compensation arrangements between parties are legal in all business dealings, including insurance, but that under both commercial and insurance law, no producer or carrier may act in any way that is detrimental to their clients' interests. PIA will continue to stand behind and defend legal compensation agreements, including profit-sharing between independent agents and their appointed carriers.

Brevik noted that a broader issue is being raised by some in the national press, who question the ability of state regulators to effectively police the industry and suggest that federal regulation of insurance would be better. "These actions demonstrate that the system of state oversight is working the way it should," Brevik said. "State regulation is by far the most effective and expeditious means of protecting consumers."

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. Visit PIA at www.PIANET.com