Workers Comp

California company ordered to stop selling workers comp policies

Joyce Famakinwa

October 21, 2016 Reprints

Workers Comp Coverage More + Less -

The California Department of Insurance has ordered a Fresno, California-based company to cease and desist selling workers compensation and liability insurance policies because the firm is not properly registered.

An order issued by the department alleges that Agricultural Contracting Services Association Inc., which does business as American Labor Alliance and its affiliate CompOne USA, was soliciting, marketing, selling and issuing to California employers what the company claimed were valid workers comp policies.

But the state insurance department found the company is not properly registered with California insurance regulators and was allegedly transacting insurance without proper authority, according to a statement from the department on Thursday.

Employers with policies from American Labor Alliance or CompOne USA may not have valid coverage, the statement said.

"Employers who purchased insurance from American Labor Alliance are likely at great financial risk,” California Insurance Commissioner Dave Jones said in the statement. "Employers must protect themselves, their employees, and their business by checking with the Department of Insurance to verify the company and agent or broker's license is valid and that the policy they purchased is also valid."

“American Labor Alliance attracted customers by marketing low (workers comp) premium rates, but the end result is employers holding worthless pieces of paper,” according to the department.

American Labor Alliance has requested an administrative hearing before an administrative law judge, according to the California insurance department. American Labor Alliance faces fines up to $5,000 per day for each day if they don’t comply with the department's cease-and-desist order.