AB 2956 - The Distinction Between an Agent and a Broker, Signed Into Law

more+
less-

On September 25, 2008, Governor Arnold Schwarzenegger signed AB 2956 into law. The new law clarifies the legal distinction between an agent and a broker. This affects insurers’ liability and whether a producer as a broker may charge broker fees.

AB 2956 was proposed by the producer trade associations in California in response to efforts by the prior administration and plaintiff lawyers to define a list of activities any one of which would render a broker an agent (the “any one act” test).

These activities served as the basis for various lawsuits and Department of Insurance disciplinary actions against brokers and insurers claiming that the brokers were de facto agents of the insurer.

The bill codifies the totality of circumstances test that has long been the common rule in California. It expands the role of the current statutory presumption of broker, increases disclosure consumer requirements, and clarifies Section CIC 1732 which was relied upon to support the any one act test.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Hinshaw & Culbertson LLP | Attorney Advertising

Written by:

more+
less-

Hinshaw & Culbertson LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×