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7. Comp insurer ordered to stop selling policies

Posted On: Dec. 27, 2017 7:13 AM CST

California Insurance Commissioner Dave Jones ordered a California-based insurer and its affiliates to stop selling workers compensation and liability policies in November.

This order came after Agricultural Contracting Services Association Inc., which does business as American Labor Alliance, and its CompOne USA affiliate were served with a cease-and-desist order by the California Department of Insurance in October 2016 for marketing, selling and issuing workers comp policies to California employers without being properly registered with California insurance regulators. An article about the order was the seventh most read Workers Compensation story on BI’s website in 2017.

The insurer claimed it only sold employee benefits and challenged the order. In November, Mr. Jones said he was protecting companies who unknowingly purchase insurance from unlicensed companies from potential financial risk and that these companies “undermine consumer protections established by California law.”

As part of his order, Mr. Jones made the decision precedential, which allows future cases involving unlicensed transactions to rely on the ruling in this case.

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