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1998 SESSION

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SB 685 Insurance agents; prohibition of agency termination, loss ratios.

Introduced by: Jackson E. Reasor, Jr. | all patrons    ...    notes | add to my profiles

SUMMARY:

Insurance agents; prohibition of agency termination; loss ratios; good cause. Prohibits property and casualty insurers from canceling at any time an agency relationship because of an adverse loss ratio on the agent's book of business if (i) the insurer required the agent to submit the application for underwriting approval or accepted policies without prior approval if the application was complete, (ii) all material on the application was complete, and (iii) no information on the application was altered or omitted by the agent. Additionally, the bill prohibits insurer termination of agency contracts with any insurance agent who has been employed by an insurance company for more than five years except for good cause. "Good cause" is defined as criminal misconduct, gross negligence relating to the business, fraud, moral turpitude, abandonment of business, or failure to pay moneys owed to the insurance company. "Good cause" does not include termination of an agency relationship due to adverse loss ratios. Finally, the bill requires insurance companies terminating any contractual relationship with an agent to notify the agent by certified mail at least 90 days prior to the proposed date of cancellation and to include with such notice a statement of the grounds upon which the insurance company bases the decision to cancel the contractual relationship.


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