CIAB Proceeds to Dismiss W. Virginia Lawsuit Following State Overturn of Counter-Signature Statute

April 8, 2004

The Council of Insurance Agents & Brokers (CIAB) reported it will dismiss its federal lawsuit challenging West Virginia’s counter-signature requirements for out-of-state insurance brokers because the state has moved to overturn that statute.

Ken Crerar, president of The Council, praised West Virginia Gov. Bob Wise for his decision earlier this week to sign the counter-signature law. The West Virginia legislature had approved the bill repealing the state’s counter-signature law, effective at the end of this year, during the legislative session that ended in March. The Council in February filed a federal lawsuit in West Virginia seeking to overturn those provisions. The suit argued that West Virginia’s counter-signature provisions violated the Privilege and Immunities Clause of the U.S. Constitution.

“Obviously, since the counter-signature requirements will soon be wiped off the books, there is no need to pursue the lawsuit,” Crerar said. “We appreciate the actions of the West Virginia legislature and Governor Wise to repeal this egregious vestige of protectionism.”

Similar lawsuits are still pending in South Dakota, Nevada and the U.S. Virgin Islands to strike down the laws in those jurisdictions that preclude out-of-state brokers from conducting business without the counter-signature of a resident broker.

The Council began its challenge of counter-signature laws last year in Florida. On Sept. 30, 2003, U.S. District Judge Robert Hinkle agreed with The Council that Florida’s law was unconstitutional and granted a summary judgment in the case.

Crerar had sent a letter to the West Virginia governor urging him to sign the law, arguing that counter-signature provisions are “anachronistic” and have no place in the global marketplace.

He called West Virginia’s decision a “tremendous step forward” and a strong statement in favor of eliminating inefficiencies in the current insurance regulatory system.

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