Commissioner imposes $4.3 million penalty on two California companies
News: 2018 Press Release
SACRAMENTO, Calif. — California Insurance Commissioner Dave Jones today issued a Decision and Order imposing a $4,345,000 penalty on American Labor Alliance and CompOne USA for selling workers' compensation and liability policies to employers of farmworkers without being properly licensed with the Department of Insurance.
“My priority as Insurance Commissioner is to protect California consumers,” said Insurance Commissioner Dave Jones. “Insurance companies not properly licensed to transact insurance in California place policyholders at risk because the insurers have not met the standards required under state law. In this case the health and wellbeing of the farmworkers was put at risk by the unlicensed insurers who sold workers’ compensation insurance illegally to the employers of farmworkers.”
Despite a Cease and Desist Order issued by the Department of Insurance in October 2016 against the Agricultural Contracting Services Association, Incorporated and its affiliates, the American Labor Alliance and CompOne USA, and Board Chair Marcus Asay, and a Decision and Order issued by Commissioner Jones in November 2017 ordering them to refrain from selling insurance policies in California, the company continued to transact insurance without a license. Today’s Decision and Order imposes the $4.3 million penalty that represents $5,000 for each of the 869 days that the companies sold workers’ compensation insurance without a license.
Employers transacting business with Agricultural Contracting Services Association, Inc., American Labor Alliance, or affiliate CompOne USA, should contact the Department of Insurance Investigation Division at 661-253-7500 for assistance in determining the validity of their workers' compensation coverage.
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- Decision and Order
- Pursuant to California Insurance Code section 12921.8, the Commissioner may also impose a monetary penalty which shall be the greater of give times the amount of money received by the company for which the license was required, or five thousand dollars ($5,000) for each day the company transacted insurance without a license.
- Link to Federal Department of Labor information on Multiple Employer Welfare Arrangement under the Employee Retirement Income Security Act: http://bit.ly/2zIAwRt
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.