IBA West Files Reply Brief with Calif. Office of Administrative Law

January 3, 2007

Insurance Brokers and Agents of the West (IBA West) submitted a reply brief on Dec. 21 to the California Office of Administrative Law, as a follow up to an earlier petition filed in September protesting then Commissioner John Garamendi’s actions to designate a decision as “precedential.”

In September, IBA West asked the OAL asked the office to declare the commissioner’s actiona a “misuse” of California Government Code Section 11425.60, which permits administrative agencies to designate certain decisions as “precedential,” because the decision would be given the force of law without going through conventional legislative or rulemaking channels, according to general counsel Steve Young. IBA WEst believes that only fully adjudicated decisions are eligible for precedential designation under the Government Code, he indicated.

OAL accepted IBA West’s petition and has been reviewing the action. According to a posting on IBA West’s web site, the CDI’s comments were “more remarkable for what it does not say than for what it does,” wrote Steve Hirsch, a partner in the San Francisco law firm of Keker & Van Nest, which is representing IBA West. “The Department’s submission makes almost no attempt to defend the merits of its practice of designating “precedential settlements.”

The settlement CDI tried to designate as “precedential” arose out of a settlement with American Reliable, in which, according to industry associations, attempted to reclassify brokers as “agents in fact” of the insurer, merely because some of their actions could be regarded as beneficial to the insurer. Several insurance associations had joined in supporting IBA West’s petition.

A copy of IBA West’s reply and supporting attachments can be viewed at http://www.ibawest.com.

Source: IBA West

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