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CA Department of Insurance

Fresno area company served cease and desist for alleged illegal insurance sales

News: 2016 Press Release

For Release: October 20, 2016
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Fresno area company served cease and desist for alleged illegal insurance sales
Employers with policies from American Labor Alliance or CompOne USA may not have valid coverage
CLOVIS, Calif. — California's insurance regulator, Dave Jones, moved to stop a central valley company from selling workers' compensation and liability policies because they are not properly registered with the Department of Insurance, which means those insured through the company may not have valid insurance coverage.

In the cease and desist, served Monday, October 17, 2016, the department alleges Agricultural Contracting Services Association, Incorporated, doing business as American Labor Alliance and its affiliate CompOne USA, are soliciting, marketing, selling, and issuing to employers statewide what the company claims are valid workers' compensation policies, when in fact the department's Investigation Division found the company is not properly registered with the regulator and is allegedly transacting insurance without proper authority.

"Employers who purchased insurance from American Labor Alliance are likely at great financial risk," said Insurance Commissioner Dave Jones. "Employers must protect themselves, their employees, and their business by checking with the Department of Insurance to verify the company and agent or broker's license is valid and that the policy they purchased is also valid."

American Labor Alliance attracted customers by marketing low workers' compensation premium rates, but the end result is employers holding worthless pieces of paper, as the policies are not valid, which means the employers have no coverage—leaving them and their employees at great risk.

The order is effective immediately. Employers transacting business with Agricultural Contracting Services Association, Inc., American Labor Alliance, or affiliate CompOne USA, should contact the Department of Insurance Investigations Division at 661-253-7500 for assistance in determining the validity of their workers' compensation coverage.

American Labor Alliance has requested an administrative hearing before an administrative law judge. The hearing is not yet scheduled. If American Labor Alliance continues marketing and selling the alleged illegal products, in defiance of the department's cease and desist order, they face fines up to $5,000 per day for each day they do not comply.

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Media Note:

Link to Federal Department of Labor information on Multiple Employer Welfare Arrangement under the Employee Retirement Income Security Act:   

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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