Commissioner imposes $4.3M penalty on Calif. companies
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California Insurance Commissioner Dave Jones on Wednesday fined two companies $4.3 million for selling workers compensation and liability policies to employers of farmworkers without being properly licensed with the Department of Insurance.
The latest move against related companies American Labor Alliance and CompOne USA follows a cease and desist order issued by the Department of Insurance in 2016 against the Agricultural Contracting Services Association Inc. and its affiliates, the American Labor Alliance and CompOne USA, and its board chairman Marcus Asay. A follow-up decision and order was issued in 2017 for the companies to refrain from selling insurance policies in California.
The company, however, continued to sell insurance without a license, according to a statement issued by the commissioner’s office Wednesday afternoon.
This latest decision and order imposes the $4.3 million penalty that represents $5,000 for each of the 869 days that the companies sold workers compensation insurance without a license, according to the statement.
"My priority as Insurance Commissioner is to protect California consumers," Commissioner Jones said in the statement. "Insurance companies not properly licensed to transact insurance in California place policyholders at risk because the insurers have not met the standards required under state law. In this case, the health and wellbeing of the farmworkers was put at risk by the unlicensed insurers who sold workers' compensation insurance illegally to the employers of farmworkers."
The commissioner’s office now says it is trying to track down businesses insured by these parties to weigh the validity of the policies.
The companies could not immediately be reached for comment.
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